There are a lot of different taxes that are imposes all over the globe. Tax that is imposed towards the owners of certain property within their jurisdiction by the municipalities is known as Property Tax. Property tax or also known as mileage tax in certain countries around the globe are normally according to value of the property itself. The tax is one type of ad valorem which an owner of a property is needed to pay a certain value of tax based on the value of the property.
Properties are group under three different categories: Land, Personal, and improvement to land. Land defines the land itself, personal are defined as movable man-made objects on the land and this make the immovable man-made objects such as buildings under the category of improvement to land. Real property, realty or real estate is the terms that are commonly used for the combination of improvements and land. To excise the tax, the authority will perform and require an appraisal on the property’s monetary value which the property tax is based on. In certain cases, a third party are assigned to perform the appraisal. The used of this property tax is different among the countries and its jurisdiction depending on the policies of each country.
Often this type of tax is mistaken as the special assessment tax but both forms of tax are distinct to each other. As property tax is depending upon the valuation of property based on fair market value for justification, the special assessment tax relies upon special enhancement also known as “benefit” for justification.
The rate for this tax is frequently given in percentage or also being expresses as mileage rate. Mileage rate is per thousand of currency units that are taxed referring the value of the property itself. In order to calculate property tax for a property with certain value, the value of the property will be multiply with the assessed rate for the property with the mileage rate, followed by dividing the value by 1,000. Let’s take an example, property that has an assessed price of $40,000 located within a municipality with the mileage rate of 25; the property itself would have a yearly property tax of $1000.