Assessment Cap Calculator: Savings From a Yearly Limit

This assessment cap calculator shows how a yearly limit on assessed value growth could lower your property tax over time. It projects two paths for your home’s assessed value: one that follows the market and one held to the cap. Then it adds up the difference in tax year by year.

How to use this calculator

1. Starting assessed value. Use the assessed value on this year’s assessment notice or your county’s online property record.
2. Market growth. Enter the yearly change in market value you expect. Nobody knows this for sure, so try a few numbers. You can enter a negative number for a falling market.
3. Assessment cap. Enter your state’s yearly limit. Your county assessor’s or appraisal district’s website will say whether a cap applies and how large it is.
4. Tax rate. Add the rates for every taxing unit on your bill. If your bill uses mills, divide by 10 (15 mills = 1.5%).
5. Years. Choose how far ahead to look, from 1 to 30 years.

How this calculator works

Each year, the uncapped value grows by the market rate. The capped value grows by the market rate or the cap, whichever is lower. The calculator applies your tax rate to both values every year and adds up the difference. If market growth is at or below the cap, both values match and the savings are $0.

Uncapped value (year t) = Prior uncapped × (1 + Market growth)
Capped value (year t)   = Prior capped × (1 + lower of Market growth and Cap)
Yearly savings          = (Uncapped − Capped) × Tax rate
Total savings           = Sum of yearly savings over all years

What it assumes:

• The default inputs ($300,000 start, 6% growth, 3% cap, 1.5% rate, 5 years) are hypothetical examples.
• The cap applies from year 1, and both values start at the same number.
• Growth, the cap and the tax rate stay the same every year.
• No sale, new construction, exemption change or rate change happens during the period.

Worked examples

Example 1: the default inputs

Hypothetical example: a $300,000 assessed value, 6% yearly market growth, a 3% cap, a 1.5% rate and 5 years.

Total savings: $135.00 + $282.15 + $442.30 + $616.36 + $805.28 = $2,281.09. In year 5, the cap holds the assessed value about $53,685 below market and saves $805.28 that year.

Example 2: a 10% cap in a hot market

Hypothetical example: a $300,000 assessed value, 12% yearly growth, a 10% cap, a 2% rate and 3 years.

1. Year 1: uncapped $336,000; capped $330,000; savings ($6,000 × 2%) = $120.00
2. Year 2: uncapped $376,320; capped $363,000; savings ($13,320 × 2%) = $266.40
3. Year 3: uncapped $421,478.40; capped $399,300; savings ($22,178.40 × 2%) = $443.57

Total savings: $120.00 + $266.40 + $443.57 = $829.97. If growth were only 2% with a 3% cap, the cap would never apply and the savings would be $0.

What your result means

The total is the property tax you would avoid compared with being taxed on full market growth. The gap widens each year the market beats the cap, which is why long-time owners in capped states can pay far less than a new buyer next door. It also shows what you could lose if the cap resets when you sell or stop living in the home.

Rules that change the answer

• Florida. After the first year, a homestead’s assessed value cannot rise more than 3% or the percent change in the CPI, whichever is less. You may be able to transfer some of the benefit to a new Florida homestead set up within three years of January 1 of the year you left the old one (Florida Department of Revenue, PT-112). When CPI is below 3%, enter the CPI figure as your cap.
• Texas. A homestead’s appraised value cannot rise more than 10% a year for an owner who qualified the homestead in both the prior and current year, plus the value of new improvements (Texas Comptroller).
• California. Assessed value is generally the prior year’s value adjusted for inflation by up to 2%, and it resets to market value after a sale or new construction (California State Board of Equalization).
• Rates still move. Local governments set rates each year, so your bill can rise even with a cap.

Common mistakes

• Treating the cap as a cap on your tax bill rather than on assessed value.
• Using one optimistic growth rate. Try a low, middle and high guess.
• Forgetting that additions and new construction can be added on top of the cap.
• Counting the savings past the year you plan to sell.
• Assuming a cap applies to rentals or second homes when your state limits it to homesteads.

Limits and when to get help

This tool uses one steady growth rate, one cap and one tax rate. It cannot model CPI changes, partial-year ownership, improvements, transfers of a cap benefit, or special rules for falling markets. Your county assessor or appraisal district can explain how your cap is applied and show your capped value on your notice.

To estimate your full bill, use the property tax calculator. To see what your exemption adds, try the homestead exemption calculator. For state details, read our homestead exemption guide and how property taxes work.