Property Tax Key Terms
Ensure your property taxes are accurate by learning property tax key termsProperty tax is administered through local governments and imposed on individuals and businesses who own real estate. Property taxes are based on the location and the market value of the property. County assessors re-evaluate property tax amounts periodically to ensure that the tax amount accurately reflects market conditions. Property owners can also request off-cycle county re-assessments if they have reason to believe that their tax rate is set too high or low.
To gain a better understanding of property taxes, it’s important that you obtain knowledge about several property tax key terms such as county assessors, fair market value, ad valorem tax, comparables, real property and tangible property.
Fair market valueFair market value is defined as the amount of money that an unobligated property buyer is willing to pay the seller. The fair market value of a property is determined by recent sales of comparable properties and other available comparable information.
Ad valorem taxAd valorem tax is another commonly used term for property tax. Ad valorem tax is based on property ownership and is determined by the assessed value of real estate or personal property. Property tax generates a great deal of revenue for states and municipalities.
ComparablesComparables, also referred to as comps, is property information used as the basis for determining accurate property values. Assessors compare property type, size, location, condition and age.
Real propertyReal property is all physical real estate. Real property includes all land and structures situated on the land used for business or residential purposes.
Cornell University Law School.
Tangible propertyTangible property is property that is movable and not permanently attached to real estate. Methods used to assess the value of tangible property can vary among taxing districts. The definition of real property and tangible property also varies among tax jurisdictions.
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