Property taxes in the United States are levied by local governments, primarily counties and municipalities, based on a property's assessed value. The assessed value is typically a percentage of its market value, determined by local assessors. Tax rates, known as millage rates, vary by jurisdiction and are applied to the assessed value to calculate the tax owed. For example, a 1.5% millage rate on a $300,000 assessed property results in a $4,500 annual tax.

The system relies on local autonomy, allowing governments to set rates and rules for assessments, exemptions, and appeals. Key factors influencing tax burdens include property value fluctuations, millage rate changes, and state-level policies. As of 2023, the average effective property tax rate in the U.S. was 1.0% to 1.5%, with total annual collections exceeding $500 billion. States like New Jersey and New York have higher average rates (2.4% and 2.1%, respectively), while states like Alaska and Wyoming collect less than 0.5%. Tax caps, such as California’s Proposition 13, limit annual increases to 2% unless reassessed, shielding homeowners from rapid hikes. Local governments use these taxes to fund schools, infrastructure, and public services, which collectively account for 10% of U.S. state and local expenditures. Data from the Tax Foundation and U.S. Census Bureau underscores the disparity: the top 10% of property owners pay nearly 30% of total taxes, while the bottom 50% contribute less than 5%. This inequity has driven recent debates over reform, including national tax base standardization and circuit breakers to protect low-income households.