The tax rate in one municipality is higher than the tax rate in another municipality. Does that mean the taxes will be higher in that municipality?
No. Taxes due on a property depends on 2 things, the tax rate and the assessed value. They are multiplied to determine the amount of the tax due.
Taxes Due = Tax Rate times Assessed Value
Assume the market value of 2 properties is the same at $100,000. In one municipality, it is assessed at $80,000, because all property in the municipality is assessed at 80% of market value. The tax rate is .024 ($24.00 per thousand). The tax due is $1,920.
In the second municipality, the $100,000 property is assessed at $95,000, because all property in the municipality is assessed at 95% of market value. The tax rate is .022 ($22.00 per thousand). The tax due is $2,090.
In this situation, both properties have the same market value, but the property with the lower tax rate has