Purchase Price

• Although an assessor can have a great deal of discretion in setting the property's value, the market is the ultimate arbiter of value. With this in mind, your property's value is usually set at or near its purchase price at least for the tax period after you buy it. The more you pay for your property, the higher your taxes will be.
  
  

Improvements

• One way to make your property taxes go up is to improve your property. Such things as additions, swimming pools or even kitchen remodeling add value to your property and can trigger a reassessment. Although each jurisdiction handles reassessments differently, you can generally assume that if you do enough work to pull a construction or building permit, your work will eventually end up affecting your assessed value and, through that, your tax bill.
  
  

Recent Transactions

• Just as your property will typically be assessed on its purchase price when you buy it, the purchase price of other similar properties in your area will affect its taxable value over time. While an improving market can significantly increase your taxes, a deteriorating one, such as a market burdened by a high foreclosure rate, can actually reduce your assessed value and, hopefully, your tax bill.
  
  

"Mill" Rates

• Although most discussion of property taxes centers around a property's value,another factor affects your tax bill -- the actual tax rate. Frequently referred to as a "mill" rate, since property taxes are usually calculated as a certain number of dollars of tax per thousand dollars of value, these rates can fluctuate in many jurisdictions to allow the taxing authority to continue collecting the money that it needs even in the face of declining property values.