How to Pay Your Property Tax Bill

Getting your property tax bill might not be the most exciting part of homeownership, but it’s one of the most important. Local governments rely on these taxes to fund essential services like schools, emergency responders, public parks, and road maintenance.

No matter what type of real estate you own, you’re responsible for these taxes—and falling behind can come with serious consequences. Depending on how your mortgage is structured, you may already be paying your property tax bill automatically each month. If not, it’s your responsibility to stay on top of the due dates, payment options, and annual assessment notices to make sure you’re paying the correct amount.

Key Takeaways

• Property taxes are typically based on your home’s assessed value and help fund local services.
• You may pay property tax through your mortgage or directly to your local tax office.
• Homeowners should review annual assessment notices for errors and understand their options if taxes become unaffordable.
• Not paying your property tax bill can result in penalties, liens, or even foreclosure.

How Are Property Taxes Calculated?

Property taxes are a type of ad valorem tax, which means they’re based on the value of your property. A local assessor estimates your property’s fair market value each year, often using recent sales data from similar homes in your area (also known as comparables, or “comps”). If your home has unique features or recent upgrades—like a new kitchen or finished basement—those could bump up your assessed value.

Adam Hamilton, Co-Founder of rental property accounting software REI Hub, added that homeowners often forget to account for tax increases after renovations.

“People think about the cost of a new deck or kitchen but forget that these upgrades increase the value of their home—and their property taxes right along with it,” said Hamilton.

In most jurisdictions, your annual tax bill is calculated by multiplying your assessed value by your local tax rate, which your city, town, or county government sets. You may also see additional fees on your bill tied to specific projects or services, such as fire department funding or school improvements.

Property taxes are typically prorated during a home sale, with the buyer and seller splitting the year’s bill based on when the property changes hands.

How to Pay Your Property Tax

There are two main ways to pay property taxes: through your mortgage or directly to your local tax office.

Pay Through Your Mortgage

If your mortgage includes an escrow account, your lender collects a portion of your annual property tax bill along with your monthly mortgage payment. This is often referred to as part of your PITI—principal, interest, taxes, and insurance. You can find this breakdown on your closing disclosure document.

You can also confirm your total annual payment by checking Box 10 of your IRS Form 1098, which your lender is required to send if you paid $600 or more in mortgage interest during the tax year. If your lender overestimates or underestimates your tax bill, you could receive a refund—or owe more to cover the difference.

Pay Your Local Tax Office Directly

If you don’t have a mortgage, or if your lender doesn’t manage your property tax payments, your local tax office will send you a bill—typically once or twice per year. Most jurisdictions offer several payment options:

• Pay in person at your local tax collector’s office.
• Mail a check or money order.
• Make an electronic check payment (eCheck) through your jurisdiction’s website.
• Pay with a credit or debit card either online or by phone. Note that this payment method may result in an additional convenience and/or processing fee.

Some areas let you break up your payment into monthly or quarterly installments, and others may offer early payment discounts. Either way, it’s wise to mark your due dates on the calendar—missing one can result in penalties and interest.

Can I Appeal My Property Tax Assessment?

If your property tax bill seems unusually high or you think you’re eligible for an exemption, you may be able to lower your tax bill by appealing it.

Hamilton noted that homeowners should consider appealing their property tax assessment if the annual increase seems much higher than it should be, or if similar properties in the area didn’t see the same increase.

There may also be mistakes on your property tax assessment that could trigger an unexpected increase. John Zinati, a real estate lawyer at Zinati Kay Barristers & Solicitors, gave an example of a client whose tax bill jumped because the county mistakenly listed their unfinished basement as finished living space.

“That mistake cost them nearly $1,000 due to overpayment until we straightened it out,” said Zinati, who advised homeowners to carefully check their annual assessment notice for inaccuracies. 

“Any discrepancy in square footage, lot size, or features mentioned should be reported immediately,” he added.

What Happens If You Don’t Pay Your Property Taxes?

Falling behind on your property tax payments can lead to serious financial trouble. You may start with penalties and interest, but if the debt remains unpaid, the local government can place a tax lien on your home. That lien could prevent you from selling or refinancing until the debt is cleared.

In some states, tax authorities can move quickly to sell your tax debt to private investors—or worse, initiate foreclosure proceedings to recover the unpaid amount. This can affect your personal credit and chances of securing future mortgage loans for years after the foreclosure occurs.

If you’re having trouble paying your bill, don’t wait until your payment deadline passes. Contact your mortgage company (if applicable) or your local tax office to inquire about your options.

“Many local areas will provide some kind of property tax assistance to those who are struggling,” said Hamilton.

The Bottom Line

Property taxes are a necessary part of owning a home, and understanding how they’re calculated and paid can help you avoid overpaying or falling behind. Check whether your lender handles your payments, review your annual assessments for errors, and reach out to your local tax office if you’re struggling to make a payment. Research and confirmation with the appropriate agencies can go a long way in protecting your home and finances.