Millage Rate

What is a millage rate?

A millage rate is the amount per $1,000 of assessed value that taxing districts use to calculate local property taxes.  For example, a home assessed at $100,000 in a district which levies a 5 mil real estate tax will owe $500 in taxes:

    \[\frac{\$100,000}{1,000} \times 5.0 = \$500\]

Millage Rate vs a Simple Percentage

So why use a millage rate in the first place?  After all, a simple percentage is a more familiar concept for most people.  Mainly, it’s for convenience due to the scale involved with assessed property values.  Continuing with the above example, I think most would agree that it is easier to refer to a 5 mil tax, than an equivalent 0.005 percent tax.

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