What Is Property Tax?

by | Aug 16, 2018 | 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 will make up your monthly mortgage payment is property tax. In this article we will cover what it is and how to find property tax. 

But, what is property tax?

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 property 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.

What are the different types of property tax?

Property tax can be broken into two types: personal and real. Personal property tax 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 property 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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Thinking about buying or selling a home?

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