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What Is Property Tax?

by | Oct 8, 2021 | Finance, Real Estate Glossary

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If you’re a potential home buyer, you’ve probably estimated a mortgage payment. One of the items that makes up your monthly mortgage payment is property tax. In this article we cover what it is and how to determine your property tax. 

What is it?

Quite simply, property tax is a real estate tax which is paid by the owner of the property. The tax is usually based on the value of the owned property, including land. So, it includes all tangible properties including homes, offices, buildings, land, etc.

How much is property tax?

The rate of this tax differs from one jurisdiction to another. Therefore, when looking to purchase a property, you should ask about the tax laws that apply in that specific area.

Understanding the Details

This tax can be broken into two types: personal and real. Personal pertains to the mobile aspects of the property, such as furniture, inventory, equipment, vehicles, etc. Real property tax, on the other hand, is levied on improvements and appreciation of the property.

What are property taxes used for?

There are many reasons, but the most important is that this tax serves as a steady source of revenue for the local government. The money is primarily used to fund water and sewer improvements, provide law enforcement and fire services. The money also funds education, road and highway construction, and other services that benefit the community-at-large.

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The information contained in this blog is for general information purposes only, and while believed to be accurate, Trelora assumes no legal responsibility for accuracy. Information provided within should not relied upon as legal advice. Please consult with your local advisors for independent information regarding availability and applicability in your market.