Mill Rate

AAA

DEFINITION of 'Mill Rate'

The amount of tax payable per dollar of the assessed value of a property. The mill rate is based on "mills"; as each mill is one-thousandth of a currency unit, one mill is equivalent to one-tenth of a cent or $0.001. Property tax in dollar terms is calculated by multiplying the assessed property value and the mill rate and dividing by 1,000. As a property may be subject to tax by a number of different authorities, mill rates are set by each taxing authority so as to meet the revenue projections in their budgets.

INVESTOPEDIA EXPLAINS 'Mill Rate'

For a given jurisdiction, mill rates may depend on the classification of property, whether it is residential, commercial, industrial, agricultural and so on.


As an example of using the mill rate to calculate the dollar amount of property tax payable, consider a property with an assessed value of $300,000 that is located in a jurisdiction with a mill rate of 15. The property tax levied would therefore be $4,500.

RELATED TERMS
  1. Tax Table

    A table or chart displaying the amount of tax due based on income ...
  2. Property Tax

    A tax assessed on real estate by the local government. The tax ...
  3. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
  4. Millage Rate

    The amount per $1,000 that is used to calculate taxes on property. ...
  5. Ad Valorem Tax

    A tax based on the assessed value of real estate or personal ...
  6. Assessed Value

    The dollar value assigned to a property for purposes of measuring ...
Related Articles
  1. Home & Auto

    4 Overlooked Homeownership Costs

    Mortgage payments aren't the only expense. Find what else you'll be on the hook for.
  2. Home & Auto

    To Rent Or Buy? The Financial Issues

    Thinking of buying a home? We look at the initial and ongoing costs, as well as the so-called benefits.
  3. Home & Auto

    How Property Taxes Are Calculated

    Understanding how property taxes work will ensure that you won't be overcharged.
  4. Taxes

    5 Tricks For Lowering Your Property Tax

    Find out what steps you can take to reduce your bill.
  5. Options & Futures

    Which is better for tax deductions, itemization or a standard deduction?

    Each deduction that you claim may result in a decrease in the amount of taxes that you owe. However, whether you receive the maximum possible deduction could depend on whether your deduction ...
  6. Taxes

    How are real estate taxes calculated?

    Find out how real estate taxes are calculated; failure to pay these taxes that can be a substantial annual expense can lead to loss of the property.
  7. Budgeting

    Will You Break Even On Your Home?

    Calculate how much your property will need to appreciate to cover the costs of owning it.
  8. Home & Auto

    Understanding Mortgage Impound Accounts

    Home buyers with low down payments may get stuck with higher mortgage payments. Find out what you get for the extra money.
  9. Retirement

    Downsize Your Home To Downsize Expenses

    Learn how to cut your mortgage, tax, gas and utilities bills.
  10. Investing Basics

    Investing In Property Tax Liens

    Property tax liens can be a viable investment alternative for experienced investors that are familiar with the real estate market.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center