Calculating Real Estate Taxes

One of the things that always comes up when discussing real estate are questions about property taxes.  Will I be reassessed?  What is millage? What’s the homestead exemption?  How do I calculate the taxes?  

I thought this would be a good first topic because it applies to every single person that owns a home.

Here is the definition of millage: The millage rate is the amount per $1,000 of property value that is used to calculate local property taxes. Assigned millage rates are multiplied by the total taxable value of the property in order to arrive at the property taxes.

For example, if the assessed value of your home is $100,000 and the millage rate is 30, you first convert 30 to a decimal by moving the decimal place to the left 3 spaces.  30 = .03 or 3%.  Next, multiply $100,000 x .03 = $3,000 which is your annual tax amount.  

Now let’s talk about figuring out your municipality’s millage rate.  This is all going to be based on Allegheny County.

There are three parts that make up your millage number:

  • County
  • School District
  • Municipality

All municipalities in Allegheny County have the same County millage which is 4.73.

You can find the list of school district millage rates here: http://apps.alleghenycounty.us/website/millsd.asp

You can find the list of municipal millage rates here:  http://apps.alleghenycounty.us/website/millmuni.asp

For an example, here are the millage rates for the city of Pittsburgh:

  • County – always  4.73
  • School District     9.84
  • Municipality         8.06
  • TOTAL MILLAGE : 22.63 or 2.263%

If you live in the city of Pittsburgh and your assessed value is $100,000, multiply that by the millage—
100,000 x .02263 (millage converted to decimal) = $2,263 would be your annual real estate tax amount.

You can find your assessed value on the Allegheny County Assessment Site. Click the link in the line above, click I Agree at the bottom and then search by address. The General Information tab comes up first and this is where you will see your assessed value. In the screen shot below, the assessed value is $78,800.

Note: City of Pittsburgh has the lowest real estate taxes in Allegheny County but the local income tax that you pay if you live within city limits is higher (3%). Most other municipalities have a local income tax rate of about 1% so factor that in when thinking about your purchase.  You’ll probably be paying lower real estate taxes but higher income tax if you choose to live in the city.

Homestead Exemption

Now let’s talk about the homestead exemption also called Act 50.  When you buy a house, or already own a house, and it is your primary residence, check to see if you have the homestead exemption.  It’ll take $18,000 off of the assessed value of your home.  Meaning, if your home is assessed at $100,000, you would only pay taxes based on $82,000.  ($100,000 minus the $18,000 homestead exemption). 

Here’s a link to the county page where you can download the Homestead Exemption application. You can check whether you have the exemption on the Allegheny County Assessment site. Just click the following link and then search for your house by address: Allegheny County Assessment Site.

This is problably enough info for my very first blog post but how about fun real estate trivia?

Which municipalities have the highest and lowest tax rates?
(other than city of Pittsburgh) 
Leave your answer in the comments and I’ll put the answer in the next post.

I’ll also be posting a spreadsheet of all of the total real estate taxes in order for each municipality in Allegheny County.  🙂