Property tax is an annual tax based on your home's assessed value, collected by your state and local governments to fund schools, infrastructure, and community services. The rate varies widely by location. Some areas have high rates, others much lower. Your property tax can change if your home's value increases or if your local tax rate changes.

Most homeowners pay this through their escrow account, spreading the cost across monthly mortgage payments. Understanding your property tax helps you budget accurately and avoid surprises, especially as your home's value grows over time.