Real Estate Math – Calculating Property Taxes

Calculating property taxes is an essential real estate math question that you may encounter on your real estate licensing exam. Each county or jurisdiction will calculate property tax based on the assessed value of the property.

You’ll need to know a few things in order to solve this real estate math problem:

1. The tax rate for your particular jurisdiction – this is usually described per \$1000 of the assessed value of the property. For example, a county may calculate taxes as \$1.50 per \$100 of the assessed value.
2. You should use the T-method to solve these types of problems since these types of problems highlight the relationship between your assessed value (Total), the tax rate (Rate), and your taxes (Part).

Let’s take an example of the real estate math problem:

If the annual tax rate for a property is \$2.10 per \$100 of assessed value, what are the annual taxes for a property assessed at \$345,000.

Solution:

The solution to this real estate math problem is:

Taxes = Assessed Value x Tax Rate

\$345,000 x \$2.10 / \$100 = \$7,245

Want more practice?

If you’d like more practice with real estate taxes, download our “125 Real Estate Math Problems Solved!” Click here to get access to 125 real estate math practice problems.