What we verified in “Property tax explained: how it is calculated and paid”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, an escrow account (sometimes called an impound account) is set up by your mortgage lender to cover certain property-related expenses; part of your monthly payment funds it, so you pay those costs in small monthly amounts instead of one large bill; many lenders require that you pay your taxes and insurance using escrow, and some escrow accounts are required by law; your mortgage servicer manages the account and pays those bills on your behalf; and because property taxes and insurance premiums can change from year to year, your escrow payment and your total monthly payment change accordingly.

   Sources 1 · What is an escrow or impound account? (last reviewed September 11, 2024): 'Many lenders require that you pay your taxes and insurance using escrow'; 'Your mortgage servicer will manage the escrow account and pay these bills on your behalf'; 'Your property taxes and insurance premiums can change from year to year… will change accordingly' · Checked October 17, 2026

2. Under Regulation X, the servicer must conduct an escrow account analysis at the end of each escrow account computation year and submit the annual escrow statement to the borrower within 30 days; the cushion it may require may be no greater than one-sixth of the estimated total annual payments from the account; if the analysis shows a surplus of 50 dollars or more, it must refund it within 30 days; if it shows a shortage of one month's payment or more, it may require repayment in equal monthly payments over at least a 12-month period; and it must pay taxes and insurance on or before the deadline to avoid a penalty, as long as the borrower is not more than 30 days behind on payments.

   Sources 2 · 12 CFR §1024.17(c)(1)(i) and (c)(3) ('a cushion that shall be no greater than one-sixth (1/6) of the estimated total annual payments from the escrow account'; 'the servicer must conduct an escrow account analysis at the completion of the escrow account computation year'), (i)(1) ('shall submit an annual escrow account statement to the borrower within 30 days of the completion of the escrow account computation year'), (f)(2)(i) ('within 30 days from the date of the analysis, refund the surplus to the borrower if the surplus is greater than or equal to 50 dollars'), (f)(3)(ii) ('greater than or equal to one month's escrow account payment'; 'repay the shortage in equal monthly payments over at least a 12-month period') and (k)(1) ('on or before the deadline to avoid a penalty, as long as the borrower's payment is not more than 30 days overdue') · Checked October 17, 2026

3. According to IRS Publication 530 for tax year 2025, you can deduct the property tax if it is assessed uniformly at a like rate on all real property throughout the community and the proceeds are used for general community or governmental purposes; to deduct it you must itemize on Schedule A (if you itemize, you cannot take the standard deduction); and the overall limit on the deduction for state and local income, sales and property taxes increased for 2025 to $40,000 ($20,000 if married filing separately), phasing down for modified adjusted gross income above $500,000 ($250,000 if married filing separately) but not below $10,000 ($5,000 if married filing separately).

   Sources 3 · Publication 530 (2025), Tax Information for Homeowners: 'You can deduct the tax if it is assessed uniformly at a like rate on all real property throughout the community'; 'If you itemize, you can't take the standard deduction'; 'The overall limit on the deduction for state and local income, sales, and property taxes has increased to $40,000' · Checked October 17, 2026

4. According to IRS Publication 530, you cannot deduct amounts you pay for local benefits that tend to increase the value of your property, such as the construction of streets, sidewalks or water and sewer systems: you add those amounts to the basis of your property; you can deduct the part of an assessment that is for maintenance, repair or interest charges related to those benefits, if you can show the amount of that part; homeowners' association assessments are not deductible as taxes because the association, rather than a state or local government, imposes them; and foreign taxes paid on real estate are not deductible.

   Sources 3 · Publication 530 (2025): 'You can't deduct amounts you pay for local benefits that tend to increase the value of your property'; 'You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges'; homeowners' association assessments; 'You can't deduct foreign taxes you paid on real estate' · Checked October 17, 2026

5. According to IRS Publication 530, if you pay taxes through an escrow account, you can deduct only the real estate taxes that the lender actually paid from escrow to the taxing authority, not everything you deposited; and in the year of purchase, for federal income tax purposes, the seller is treated as paying the property taxes up to but not including the date of sale and the buyer from the date of sale, so each deducts only their own share.

   Sources 3 · Publication 530 (2025): 'You can deduct only the real estate taxes that the lender actually paid from escrow to the taxing authority'; 'the seller is treated as paying the property taxes up to but not including the date of sale' · Checked October 17, 2026

6. According to the California State Board of Equalization, Proposition 13 in most cases limited future property tax increases to a maximum of 2 percent per year, and a property's base year value is its market value as established in 1975 or when the property last changed ownership or underwent new construction.

   Sources 4 · Decline in Value (Proposition 8): 'In most cases, limited future property tax increases to a maximum of 2 percent per year'; 'A property's base year value is the market value of real property as established in 1975 or when the property last changed ownership or underwent new construction' · Checked October 17, 2026

7. Under section 193.155 of the Florida Statutes, homestead property is reassessed every January 1 and the change may not exceed the lower of 3 percent of the prior year's assessed value or the percentage change in the Consumer Price Index; and it is assessed at just value as of January 1 of the year following a change of ownership.

   Sources 5 · Fla. Stat. §193.155(1)(a)–(b) ('shall not exceed the lower of the following'; 'Three percent of the assessed value of the property for the prior year'; 'The percentage change in the Consumer Price Index') and (3)(a) ('shall be assessed at just value as of January 1 of the year following a change of ownership') · Checked October 17, 2026

8. According to the California State Board of Equalization, the Homeowners' Exemption is a $7,000 reduction in the taxable value of a qualifying owner-occupied home; the homeowner makes a one-time filing with the county assessor where the property is located, no later than February 15 to receive the full exemption for that year.

   Sources 6 · Homeowners' Exemption: 'a $7,000 reduction in the taxable value for a qualifying owner-occupied home'; 'the homeowner must make a one-time filing with the county assessor where the property is located'; 'no later than February 15 to receive the full exemption for that year' · Checked October 17, 2026

9. Under section 196.011 of the Florida Statutes, a person entitled to an exemption must file an application with the county property appraiser on or before March 1 of each year; and in each succeeding year, on or before February 1, the property appraiser mails a renewal application, which is accepted as evidence of the exemption unless the appraiser denies it.

   Sources 7 · Fla. Stat. §196.011(1)(a) ('shall, on or before March 1 of each year, file an application for exemption with the county property appraiser') and (7)(a) ('in each succeeding year on or before February 1, the property appraiser shall mail a renewal application to the applicant') · Checked October 17, 2026

10. Under section 194.011 of the Florida Statutes, a taxpayer who objects to an assessment may request an informal conference with the property appraiser, which is not a required step before administrative or judicial review; and, for valuation issues, may file a petition with the value adjustment board on or before the 25th day following the mailing of the assessment notice.

    Sources 8 · Fla. Stat. §194.011(2) ('may request the property appraiser to informally confer with the taxpayer') and (3)(d) ('on or before the 25th day following the mailing of notice by the property appraiser as provided in subsection (1)') · Checked October 17, 2026

11. HUD-approved housing counselors provide independent advice on buying a home, renting, defaults and credit issues, often free or at low cost.

    Sources 9 · Find a Housing Counselor: 'advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'often at little or no cost to you' · Checked October 17, 2026