Millage Rate Definition
The millage rate is an old term that refers to the tax rate levied on properties. Popularly called the mill rate, this tax rate is used in estimating property taxes imposed on properties. The millage rate is calculated as 1/1,000 of a dollar, hence the taxable value of a property determines the millage rate of the property. Although the millage rate is often used for property taxes, it is sometimes used to estimate school taxes. The local or governing authority in a region uses the mill rate as an ad valorem tax, under property taxation.
A Little More on What is a Millage Rate
Properties that have deed are subjected to the millage rates if the value o such property is $10,000 for instance, the millage rate is $10. Oftentimes, people wonder why the millage rate is calculated as 1/1000 of a dollar, the reason for this calculation can be linked to the origin of millage. The term ‘Millage’ can be traced to a Latin word; “Millesimum,” with the definition; thousandth part.
How to Apply Millage Rates
Millage rates are often used for individual properties when used, these rates are multiplied by the taxable value of the properties. The taxable value of every property is usually assessed using the market value of the property, the millage rate is an important metric in estimating the annual property taxes paid by homeowners.
Where Millage Rates Come From
Millage rates are not the same across different districts or local taxing authorities, while there is a standard for calculating millage rates on properties, each has its millage rates. Millage rates and the tax-assessed value of a property (otherwise called taxable value) are calculated to identify the annual property taxes individuals will pay and the tax liability incurred on a property.
Therefore, in most situations, the millage rate is calculated as a sum of the diverse millage rates charged by counties, districts, municipalities, and others.