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Property tax, millage tax is an ad valorem tax that an owner of real estate or other property pays on the value of the property being taxed. There are three species or types of property: Land, Improvements to Land (immovable man made things), and Personalty (movable man made things). Real estate, real property or realty are all terms for the combination of land and improvements. The taxing authority requires and/or performs an appraisal of the monetary value of the property, and tax is assessed in proportion to that value. Forms of property tax used vary between countries and jurisdictions. An ad-valorem tax is a tax based on the value of real estate or personal property. ...
Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...
Property designates those things that are commonly recognized as being the possessions of a person or group. ...
Appraisal is the act of estimating the monetary value of real, personal, or intangible property, usually performed as a service by someone recognized as an expert or certified by an organization. ...
There is a form of tax which is often confused with the property tax. This is the special assessment tax. These are two distinct forms of taxation: one (ad valorem tax) relying upon the fair market value of the property being taxed for justification, and the other, (special assessment) relying upon a special enhancement called a "benefit" for its justification. Special assessment is the term used to designate a unique charge government units can assess against real estate parcels for certain public projects. ...
The property tax rate is often given as a percentage (amount of tax per hundred currency units of property value). It may also be expressed as a permille (amount of tax per thousand currency units of property value), which is also known as a millage rate or mill levy. (A mill is also one-thousandth of a dollar.) To calculate the property tax, the authority will multiply the assessed value of the property by the mill rate and then divide by 1,000. For example, a property with an assessed value of US$ 50,000 located in a municipality with a mill rate of 20 mills would have a property tax bill of US$ 1,000.00 per year.[1] The percent sign A percentage is a way of expressing numbers as fractions of 100 and is often denoted using the percent sign, %. For example, 45. ...
A permille or per mille is a tenth of a percent or one part per thousand. ...
The mill or mille(â‚¥) (sometimes mil in the UK) is an abstract unit of currency. ...
Countries
Canada Many provinces in Canada levy property tax on real estate based upon the current use and value of the land and this is the major source of revenue for most municipal governments in Canada. While property tax levels vary between municipalities in a province there is usually common property assessment or valuation criteria laid out in provincial legislation. There is a trend to use a market value standard for valuation purposes in most provinces with varying revaluation cycles. A number of provinces have established an annual reassessment cycle where market activity warrants while others have longer periods between valuation periods.
Hong Kong In Hong Kong, there is a kind of tax named property tax, but it is not an ad valorem tax, it is to be classified into Income tax. An ad-valorem tax is a tax based on the value of real estate or personal property. ...
An income tax is a tax levied on the financial income of persons, corporations, or other legal entities. ...
According to HK Inland Revenue Ordinance IRO s5B, all property owner shall not be subject to this tax, unless the HK property owner has received a consideration, the example is rental income for the year of assessment. The property tax shall be computed on the net assessable value at the standard rate. HK Inland Revenue Ordinance Cap. ...
Consideration is something that is done or promised in return for a contractual promise. ...
Year of Assessment The period of assessment is from April 1st to March 31st of the following year. Net assessable value The formula is: - Net assessable value = 80% of Assessable value.
- HK property tax payable = Net assessment value X Property tax standard rate
- Assessable value = Rental income + Premium + (Rental bad debt recovered - Irrecoverable rental) - Rates paid by owner.
See also Rates are a form of taxation system in the United Kingdom and elsewhere, such as New Zealand, historically used to fund local government. ...
Jamaica this tax is paid on in just the same way as would Mortgage. It is an annual payment depending on the value of your assests meaning your property.
Netherlands Property tax (Dutch: Onroerend goed belasting or Onroerende zaak belasting (OZB) ) is levied on homes on a municipal basis in two parts: for the one who lives in the house and one for the owner of the house. When one has a rental home, he/she should only pay the living part of the tax. The last years lots of concern are because of the annual raise of this tax by more than 10% in some municipalities. As of 2005, there is a Parliament proposal to retain only the owner's part of the property tax and to raise it annually not more than the inflation rate. The Tweede Kamer (second chamber) is the lower house of the Staten-Generaal, the parliament in the Netherlands. ...
United Kingdom There is currently no ad valorem tax on residential property. Two former systems were dropped because of their extreme unpopularity. They were - Schedule A income tax, a central government tax that was levied on the imputed rent, that is the rent that owner-occupiers of land would have been receiving from a tenant had they not been living in the houses they owned. However, actual (as opposed to imputed) rent is still subject to income tax under Schedule A;
- Rates, a local government tax that was levied in proportion to the assessed value of property. This was replaced under the Thatcher government by a poll tax, which proved even more unpopular than the rates, and was replaced by a mixed council tax which combines elements of property tax and a poll tax. Rates are still (2006) levied on business property, though some classes of business are exempt.
An income tax is a tax levied on the financial income of persons, corporations, or other legal entities. ...
An owner-occupier is a person who lives in a house that he or she owns. ...
An owner-occupier is a person who lives in a house that he or she owns. ...
Rates are a form of taxation system in the United Kingdom and elsewhere, such as New Zealand, historically used to fund local government. ...
Local governments are administrative offices of an area smaller than a state or province. ...
Margaret Hilda Thatcher, Baroness Thatcher, LG, OM, PC (born 13 October 1925), is a former Prime Minister of the United Kingdom, in office from 1979 to 1990. ...
A poll tax, head tax, or capitation is a tax of a uniform, fixed amount per individual (as opposed to a percentage of income). ...
The Council Tax is the main form of local taxation in England, Scotland and Wales. ...
United States In the United States, property tax on real estate is usually assessed by local government, at the municipal or county level. A very important benefit of a tax on property over a tax on income is that the revenue always equals the tax levy, unlike income or sales taxes, which can result in shortfalls producing deficits. The property tax always produces the required revenue for municipalities' tax levies. Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...
Local governments are administrative offices of an area smaller than a state or province. ...
It has been suggested that this article or section be merged into Local government of the United States. ...
A county is generally a sub-unit of regional self-government within a sovereign jurisdiction. ...
The assessment is made up of two components -- the improvement or building value and the land or site value. In some states, personal property is also taxed. A tax assessor is a public official who determines the value of real property for the purpose of apportioning the tax levy. An appraiser may work for government or private industry and may determine the value of real property for any purpose. Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
Tax assessor offices maintain inventory information about improvements to real estate. They also create and maintain tax maps. This is accomplished with the help of surveyors. On tax maps, individual properties are shown and given unique parcel identifiers. The tax maps help to ensure that no properties are omitted from the tax rolls and that no properties are taxed more than once. Real property taxes are usually collected by an official other than the assessor. Examples of actual assessment data for real estate can be found for Maryland, King's County, Washington, Indiana, New Jersey, New York. In fact many localities have gone "online". Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
Surveyor at work with a leveling instrument. ...
Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
The assessment of an individual piece of real estate may be according to one or more of the normally accepted methods of valuation (ie income approach, market value or replacement cost). Assessments may be given at 100 percent of value or at some lesser percentage. In most if not all assessment jurisdictions, the determination of value made by the assessor is subject to some sort of administrative or judicial review, if the appeal is instituted by the property owner. Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
Ad Valorem (of value) property taxes are based on fair market property values of individual estates. A local tax assessor then applies an established assessment rate to the fair market value. By multiplying the tax rate x the assessed value of the property, a tax due is calculated. These taxes are collected by municipalities such as cities, counties, and districts in many locations in the United States. They fund municipal budgets for school systems, sewers, parks, libraries, fire stations, hospitals, etc. Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
Budget generally refers to a list of all planned expenses and revenues. ...
After determining a budget at the municipal level, a legislative appropriation determines how the monies will be collected and distributed. After that, a tax authority levies the tax. An appeal is permitted. Equalization is then considered by a board of equalizers to assure fair treatment. Then a tax rate is determined by dividing the municipal budget by the assessment role of that municipality. Your tax rate x the assessed value of your property determines the tax you owe. Budget generally refers to a list of all planned expenses and revenues. ...
Some jurisdictions have both ad valorem and non-ad valorem property taxes, the latter representing a fixed charge (regardless of value) for items such as street lighting and storm sewer control.
In the US, another form of property tax is the personal property tax, which can target
In some states, it is permissible to separate the real estate tax, into two separate taxes -- one the land value and one on the building value. See Land Value Taxation Karl Benzs Velo (vélo means bicycle in French) model (1894) - entered into the first automobile race 2005 MINI Cooper S. An automobile (also motor car or simply car) is a wheeled passenger vehicle that carries its own motor. ...
A boat is a craft or vessel designed to float on, and provide transport over, water. ...
An Airbus A380, currently the worlds largest passenger airliner An aircraft is any vehicle or craft capable of atmospheric flight. ...
A car (Toyota Corolla S) is a durable good in economics. ...
Intangible assets are defined as assets that are not physical in nature. ...
It has been suggested that shareholder be merged into this article or section. ...
In finance, a bond is a debt security, in which the issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity. ...
Personal property taxes can be assessed at almost any level of government, though they are perhaps most commonly assessed by states. Federal courts Supreme Court Chief Justice Associate Justices Elections Presidential elections Midterm elections Political Parties Democratic Republican Third parties Libertarian Party State & Local government Governors Legislatures (List) State Courts Counties, Cities, and Towns Other countries Politics Portal A U.S. state is any one of the fifty subnational entities of...
Effects
Sprawl Property tax on real estate changes the incentives for developing land, which in turn affects land use patterns. One of the main concerns is whether or not it encourages urban sprawl. Urban sprawl (also: suburban sprawl), a term with pejorative implication, refers to the unplanned, rapid and expansive growth of a greater metropolitan area, traditionally suburbs (or exurbs) over a large area. ...
The market value of undeveloped real estate reflects a property's current use as well as its development potential. As a city expands, relatively cheap and undeveloped lands (such as farms, ranches, private conservation parks, etc.) increase in value as neighboring areas are developed into retail, industrial, or residential units. This raises the land value, which increases the property tax that must be paid on agricultural land, but does not increase the amount of revenue per land area available to the owner. This, along with a higher sale price, increases the incentive to rent or sell agricultural land to developers. On the other hand, a property owner who develops a parcel must thereafter pay a higher tax, based on the value of the improvements. This makes the development less attractive than it would otherwise be. Overall, these effects result in lower density development, which tends to increase sprawl. Market capitalization, often abbreviated to market cap, mkt. ...
Revenue is a U.S. business term for the amount of money that a company earns from its activities in a given period, mostly from sales of products and/or services to customers. ...
Attempts to reduce the impact of property taxes on sprawl include:
- Land value taxation - This method separates the value of a given property into its actual components - land value and improvement value. A gradually lower and lower tax is levied on the improvement value and a higher tax is levied on the land value to insure revenue-neutrality. This method is also known as two-tiered or split-rate taxation.
- Most cities have a higher building tax than surrounding suburban and rural areas. By removing improvements as a factor in the property taxes, the penalty against construction and renovation in already urbanized areas is removed. Increasing the tax on land value discourages land speculation - which forces development further away from central cities - and encourages efficient land use.
- Current-use valuation - This method assesses the value of a given property based only upon its current use. Much like land value taxation, this reduces the effect of city encroachment.
- Conservation easements - The property owner adds a restriction to the property prohibiting future development. This effectively removes the development potential as a factor in the property taxes.
- Exemptions - Exempting favored classes of real estate (such as farms, ranches, cemeteries or private conservation parks) from the property tax altogether or assesing their value at a very minimal amount (for example, $1 per acre).
- Forcing higher density housing - In the Portland, Oregon area (for example), local municipalities are often forced to accept higher density housing with small lot sizes. This is governed by a multi-county development control board, in Portland's case Metro.
- Urban growth boundary or Green belt - Government declares some land undevelopable until a date in the future. This forces regional development back into the urban core, increasing density but also land and housing prices. It may also cause development to skip over the restricted-use zone, to occur in more distant areas, or to move to other cities.
Land value taxation (LVT), or site value taxation, is the policy of raising state revenues by charging each landholder a portion of the value of a site or parcel of land that would exist even if that site had no improvements. ...
In the United States, a conservation easement is an easement — a transfer of usage rights — which creates a legally enforceable land preservation agreement between a landowner and a municipality or a qualified land protection organization (often called a land trust), for the purposes of conservation. ...
Nickname: City of Roses, Stumptown, Bridgetown, PDX Location in Multnomah County and the state of Oregon Coordinates: Country United States State Oregon County Multnomah County Incorporated February 8, 1851 Government - Mayor Tom Potter Area - City 145. ...
Metro, previously known as the Metropolitan Service District, is the regional governmental agency for the Oregon portion of the Portland metropolitan area. ...
An urban growth boundary, or UGB, is a regional boundary, set in an attempt to control urbanization by designating the area inside the boundary for high density urban development and the area outside the boundary for low density rural development. ...
For other uses of the word Greenbelt, see Greenbelt (disambiguation). ...
Distributional Property tax has been thought to be regressive (that is, to fall disproportionately on those of lower income) because of its impact on particular low-income/high-asset groups such as pensioners and farmers in drought years. Because these persons have high-assets accumulated over time, they have a high property tax liability, although their realized income is low. Therefore, a larger proportion of their income goes to paying the tax. In areas with speculative land appreciation (such as California in the 1970s and 2000s), there may be little or no relationship between property taxes and a homeowner's ability to pay them short of selling the property [2]. This issue was a common argument used by supporters of such measures as California Proposition 13 or Oregon Ballot Measure 5; some economists have even called for the abolition of property taxes altogether, to be replaced by income taxes, consumption taxes such as Europe's VAT, or a combination of both. Others, however, have argued that property taxes are broadly progressive, since people of higher incomes are disproportionately likely to own property. These two points of view are not incompatible - it is possible for a tax to be progressive in general but to be regressive in relation to minority groups. However, although not direct, and not likely one-to-one, property renters are subject to property taxes as well. The owner's cost of taxation is passed on to the renter (occupant). A regressive tax is a tax imposed so that the tax rate decreases as the amount to which the rate is applied increases. ...
A pension is a steady income given to a person (usually after retirement). ...
A drought is a period of time when there is not enough water to support agricultural, urban, human, or environmental water needs. ...
Proposition 13, officially titled the Peoples Initiative to Limit Property Taxation, was a ballot initiative to amend the constitution of the state of California. ...
Ballot Measure 5 of 1990 established state constitutional limits (Article XI, Section 11) on Oregons property taxes on real estate. ...
An income tax is a tax levied on the financial income of persons, corporations, or other legal entities. ...
A sales tax is a tax on consumption. ...
Value added tax (VAT) is tax on exchanges. ...
A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. ...
As property increases in value the possibility exists that new buyers might pay taxes on outdated values thus placing an unfair burden on the rest of the property owners. To correct this imbalance municipalities periodically revalue property. Revaluation produces an up to date value to be used in determination of the tax rate necessary to produce the required tax levy.
A consequence of this is that existing owners are reassesed as well as new owners and thus are required to pay taxes on property the value of which is determined by market forces. In an effort to relieve the frequently large tax burdens on existing owners communities have introduced exemptions.
In some states, laws provide for exemptions (typically called homestead exemptions) and/or limits on the percentage increase in tax, which limit the yearly increase in property tax so that owner-occupants are not "taxed out of their homes". Generally, these exemptions and ceilings are available only to property owners who use their property as their principal residence. Homestead exemptions generally cannot be claimed on investment properties and second homes. When a homesteaded property changes ownership, the property tax often rises sharply and the property's sale price may become the basis for new exemptions and limits available to the new owner-occupant. A homestead exemption is a exemption from property taxes which can be applied to a home. ...
Homestead exemptions increase the complexity of property tax collection and sometimes provide an easy opportunity for people who own several properties to benefit from tax credits to which they are not entitled. Since there is no national database that links home ownership with Social Security numbers, landlords sometimes gain homestead tax credits by claiming multiple properties in different states, and even their own state, as their "principal residence", while only one property is truly their residence. [3] In 2005, several US Senators and Congressmen were found to have erroneously claimed "second homes" in the greater Washington, D.C. area as their "principal residences", giving them property tax credits to which they were not entitled. [4] [5] Sample United States Social Security Card In the United States, a Social Security number (or SSN) is a 9 digit number issued to citizens, permanent residents, and temporary (working) residents under section 205(c)(2) of the Social Security Act, codified as . ...
Undeserved homestead exemption credits became so ubiquitous in the state of Maryland that a bill was introduced in the 2006 legislative session to enable validation of principal residence status through the use of a principal residence verification field on the state income tax return. [6] The bill passed unanimously in the Maryland House of Delegates, but died in committee in the Maryland Senate.
The fairness of property tax collection and distribution is a hotly-debated topic. Some people feel school systems would be more uniform if the taxes were collected and distributed at a state level, thereby equalising the funding of school districts. Others are reluctant to have a higher level of government determine the rates and allocations, preferring to leave the decisions to government levels "closer to the people".
In Rhode Island efforts are being made to modify revaluation practices to preserve the major benefit of property taxation, the reliability of tax revenue, while providing for what some view as a correction of the unfair distribution of tax burdens on existing owners of property. See Providence Journal editorial [7]
The Supreme Court has held that Congress cannot directly tax land ownership, unless the tax is apportioned among the states based upon representation/poulation. In an apportioned land tax, each state would have its own rate of taxation sufficient to raise it pro-rata share of the total revenue to be financed by a land tax. Such an apportioned tax on land had been used on many occasions up through the Civil War. Federal courts Supreme Court Chief Justice Associate Justices Elections Presidential elections Midterm elections Political Parties Democratic Republican Third parties Libertarian Party State & Local government Governors Legislatures (List) State Courts Counties, Cities, and Towns Other countries Politics Portal The Supreme Court of the United States (SCOTUS) is the highest judicial body...
Indirect taxes on the transfer of land are permitted without apportionment: in the past, this has taken the form of requiring revenue stamps to be affixed to deeds and mortgages, but these are no longer required by federal law. Under the Internal Revenue Code, the government realizes a substantial amount of revenue from income taxes on capital gains from the sale of land, and in estate taxes from the passage of property (including land) upon the death of its owner. An 1862 US 3-cent stamp used for proprietary articles A revenue stamp, tax stamp or fiscal stamp is a type of adhesive label used to collect taxes or fees on various items. ...
In [[finance]], a capital gain is profit that results from the appreciation of a capital asset from its purchase price. ...
Estate tax is a form of tax imposed in the United States upon the transfer of the property of the estate of a deceased person that is left to a living person or organization. ...
The Supreme Court has not directly ruled on the question of whether Congress may impose an unapportioned tax on the "privilege" of owning land with the "measure" of the tax being the value of the land.
Development case study: New Orleans Before the American Civil War, New Orleans was one of the largest cities in the United States, with a population of over 100,000. The federal government was funded by import and export duties and the states and local governments were funded by property taxes. This article is becoming very long. ...
New Orleans is the largest city in the state of Louisiana, United States of America. ...
New Orleans was sensitive to property taxes. To make the job of the assessors easier, the assessors adopted a rule that said that property taxes were proportional to the front footage of the lot, that is, the length of the lot along its street. The depth of lots was fairly consistent due to the streets' fairly consistent layout. The rule was thus relatively accurate since land, not the structure, represented the value of the property. Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
To minimize property tax, lots were narrow but deep. As a result, houses were similarly narrow but deep. This is a striking difference from the contemporary ranch-style homes. The New Orleans house of that time became known as a shotgun house because it was said that you could stand in the front door and shoot a shotgun all the way through to the rear wall without hitting anything within. Hallways were avoided because they took up valuable room width inside the house. The shotgun house is a type of house that was the most popular style in the American South from just after the Civil War until the 1920s. ...
The shotgun double became popular then. A shotgun double was two residences under one roof and the building was two rooms wide, instead of the shotgun’s single room width. The double has two front doors and the two residences share a common set of center chimneys. Each room had a fireplace for heat. This style saved the narrow alleys between each house that lead to the back yard as well as the construction cost of the multiple chimneys.
Citizens of New Orleans complained that their neighbor with a two-story house paid the same property tax as that paid by the owner of a one-story house. The assessors changed their rule to one that determined property taxes under a formula: the front footage times the number of stories the house had. Assessor as evaluator An assessor is an expert that calculates the amounts to be paid or assessed for tax or insurance purposes. ...
As a result of that rule change, the camelback house was born. A camelback house has a hump at the back; it was two stories tall in the back but only one in the front. In response, the assessors made a new rule that determined how far back the hump began before the house was determined to be a two story house.
Nevertheless, the property owners complained that the much grander camelback down the street paid the same tax as the single story house. In exasperation, the assessors made an entirely new rule: the tax would be based on the number of rooms within the house.
To the extent that anyone considered it previously, closets became totally unrealistic. A closet was counted as a room because a closet is an enclosed space with a door. So instead of closets, home owners used furniture to store clothes - the chiffarobe was born.
So, the New Orleans house is narrow and deep. It has no closets or hallways but every room has a fire place. City water and sewerage was added later so all the rooms that require this are at the back of the house at the site of the back porch.
See also Land value taxation (LVT), or site value taxation, is the policy of raising state revenues by charging each landholder a portion of the value of a site or parcel of land that would exist even if that site had no improvements. ...
A mill levy is a property tax rate. ...
Proposition 2½[1] was a ballot initiative passed by Massachusetts voters in 1980. ...
A UK vehicle licence (tax disc) In the United Kingdom, Vehicle Excise Duty (VED) (often known as road tax, although it is not hypothecated for spending on roads, and before 1936 as road fund licence) is an annual tax on the use of motor vehicles on the public roads. ...
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