What Is Property Tax?

Property tax is an annual tax on the value of real estate, assessed and collected by local governments (counties, cities, school districts). The amount you owe depends on your property's assessed value and the local tax rate (the "mill rate"). Homeowners can often appeal their property assessment if they think it's too high. You may deduct property taxes on your federal return as part of the SALT deduction, up to the $10,000 cap. Many states offer exemptions for seniors, veterans, and low-income homeowners.