Property tax is that tax which a possessor of real estate or other property pays on the value of the property being taxed. Some governments also collect taxes from the owners of such property as stocks and bonds. Property taxes provide much of the income of counties, cities, and towns in many countries. Local governments depend on these taxes to help finance education, police and fire protection, street repair, and other services. Some provincial governments also collect property taxes.
The property tax rate is often expressed as a percentage. property tax rate may also be stated as a permille which is also known as a millage rate or mill levy. To compute the property tax, the taxation official will multiply the assessed value of the property being taxed by the tax 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 10 mills would have a property tax bill of US$ 500.00 per year.
In United States, property tax on real estate is usually calculated by local government at the local level. The assessment is composed of two components - the improvement or building value and the land or site value.
A tax assessor is a public servant who fixes the value of real property for the objective of apportioning the tax levy. An evaluator may work for government or private industry and may find out the value of real property for any purpose.
Tax assessor offices maintain information's about improvements to real estate. They also create and maintain tax maps. This is information is managed and oragnised with the help of surveyors. On tax maps and charts, properties held by indiviudals are plotted. These maps and charts facilitate in ensuring that no properties are skipped from the being taxed and that no properties are taxed twice. Real property taxes are often fetched by an official other than the assessor of the property.
The assessment of an individual piece of real estate may be according to one or more of the generally consented methods of valuation i.e. income approach, market value or replacement cost. Assessments may be given at full value of the property or at some lesser percentage. In most of the assessment jurisdictions, the determination of value made by the assessor is a substance to some sort of administrative or judicial review and scrutiny, if the appeal is introduced by the property owner.
A local tax assessor applies an affirmed tax rate to the fair market value. The product of tax rate and the estimated value of the asset is tax which is due. These taxes are received by local authorities of cities, counties, and districts in the United States. These taxes serves the purpose of funding civil budgets for schools, sewers, parks, libraries, fire stations, hospitals, etc.
Most people know that property tax applies to real property; however, they are unaware of the fact that property tax also applies to personal property. Most personal property owned by individuals is excused. For example, household goods and personal effects are not subject to property tax. However, if these items are used in a business, property tax affects. Personal property tax is not valid on business inventory, or ethereal possessions such as copyrights and trademarks. Personal property is subject to the equal tax rate as real property. The attributes that differentiates real and personal property is mobility. Real property includes land property, structures, developments to land, and some of the tools attached to land or structures. Personal property includes machinery, equipment, furnishings and furniture, and goods of businesses and farmers. It also comprises any improvements made to land rented from the government.
Unless specifically exempt, all tangible personal property and some intangible assets are subject to personal property tax. The major categories of taxable personal property include the following: