What Are Property Taxes? How They Work

By Motley Fool Staff – Updated Aug 13, 2025 at 2:33 AM

Key Points

Property taxes fund essential services like schools and emergency services, based on home value.
You can potentially decrease your property tax through exemptions for homeowners, seniors, and veterans.
Consider relocating to states like Colorado or Alabama for lower property tax rates, but weigh cost of living.

Home values have soared in most major markets, and interest rates remain stubbornly high. Property taxes aren't likely to go down soon, either. Here, we'll look at property taxes -- why they're collected, how they're used, ways that you can reduce them, and places where they're less painful than others.

Loading paragraph...