Property Tax Key Terms

Ensure your property taxes are accurate by learning property tax key terms

Property 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.

County assessors

County assessors are government officials responsible for identifying, listing and calculating the assessed value of property for tax purposes. Assessors appraise real estate at 100 percent of its fair market value.

Fair market value

Fair 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 tax

Ad 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.

Comparables

Comparables, 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 property

Real 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 property

Tangible 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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