How is the mill rate (tax rate) determined?

Property taxes are levied according to a mill rate. The mill rate is the dollars / cents per $1,000 of value that you will pay in property taxes. For example, if you own a home valued at $100,000 and the tax rate is 20 mills, then your tax bill will be $2,000 (or $20 x 100).

Calculating Tax Rate

In calculating a property tax rate, the Portland City Council determines the amount of revenue needed to be raised by the property tax to fund all of our municipal services. That amount is then divided by the total local assessed valuation to get the local tax rate. For example, a city that has a local assessed valuation of $100 million and needs to raise $2 million in property taxes will require a tax rate of 20 mills to do so ($2,000,000 divided by $100,000,000 equals .020).

Percentage Value

Another way to look at the mill rate is as a percentage of value. For example, if your home is valued at $100,000 and the mill rate is 20, then your property taxes are equal to 2% of your home’s value; if the mill rate is 15, then it is 1.5% of the home’s value; 10 mills is 1%.

Taxes Raised & Payment

The assessor calculates how much must be raised in property taxes based on what the City Council has approved. A tax commitment listing all the property in town, its value and the taxes that are owed is then signed by the municipal officers and given to the tax collector who sends out the tax bills. In Portland, property taxes are paid in two installments due in September and March. Property taxes may also be escrowed and payments made as part of a homeowner’s monthly mortgage payment.