Property Tax is a type of tax imposed on property owned by a person or a legal organization such as a business. It is a type of regressive tax that applies to real properties - tangible and intangible.
This is usually determined by the local government where the property is located and paid by the property owner. The tax amount is generally calculated based on the value of the property.
This type of tax can also be applied to both commercial and agricultural equipment, as well as, inventory. Automobiles, jewelry, and furniture are sometimes subject to tax as are intangibles like bonds, mortgages, and stock that reflect claims on or ownership of tangible objects.
Types of Property Tax
There are four broad types of properties that this tax can be applied to that’s how this is categorized and they are -
- Land tax
- Land improvements tax (i.e. house renovations or restorations)
- Personal property tax (i.e. car, jewelry)
- Intangible property tax (i.e. intellectual creations)
The payment amount is determined by gross value, rather than the entire net wealth of a person or corporation, which excludes loans.
Use of this term in a sentence:
- Individual property tax rates may measure a household's capacity to pay as well as the services it gets in the form of public services.
- Property tax, as a key source of revenue, is critical to decentralization and local government authority.
- When property taxes are not paid on time, the taxing body may take necessary steps against the property owner.
More from this Section
- Capital adequacy management
Capital adequacy management is a bank’s decision about the amount of capital it should ...
- Savings deposits
Savings deposits is the interest-bearing funds left with banks for a period of weeks, ...
- Gross Domestic Product (GDP)
Gross Domestic Product is the monetary value of all the finished goods and services produced ...
Dealing is the buying and selling of foreign currencies in the foreign exchange markets ...