Real state property tax is a tax you will pay if you own a house or a property. You need to understand the following two definitions.

**Market value:**

The market value of a property is the selling price of a property.

Assessed value:

The assessed value of a property is a percent of the market value.

The state uses the assessed value of the property to find out how tax you will pay.

In the USA, the assessed value depends on the state you live and can be as low as 10% or as high as 100%.

**Example #1**:

A house has a market value of 220,000. The assessed value of the house is 70%. If the tax rate is $2 per $100, how much is the property tax?

Assessed value = Market value × rate of assessment = 220,000 × 0.70 = 154000

The assessed value in hundreds is 154000 / 100

The assessed value is 1540 dollars

Property tax = assessed value × tax rate = 1540 × 2 = 3080 dollars

**Example #2**:

A house has a market value of 650000. The assessed value of the house is 80%. If the tax rate is $1.5 per $100, how much is the property tax?

Assessed value = Market value × rate of assessment = 650000 × 0.80 = 520000

The assessed value in hundreds is 520000 / 100

The assessed value is 5200 dollars

Property tax = assessed value × tax rate = 5200 × 1.5 = 7800 dollars

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