First Known Use of property tax
Financial Definition of PROPERTY TAX
What It Is
Property tax is a tax on property -- usually real estate -- as determined by an assessor.
How It Works
Let's assume you own a house. The property tax assessor in your municipality will likely assign a value to the house and calculate your property taxes based on that assessed value. It is important to note that assessed value is usually not the same as a property's fair market value.
For example, if the property tax rate is 4% and your house's assessed value is $200,000, then your property tax liability equals (.04 x $200,000) or $8,000. The assessed value is often computed by incorporating the purchases and sales of similar properties in nearby areas.
Why It Matters
Property taxes are usually collected by cities or counties, and the funds usually pay for the local school, fire and police districts.
Tax rolls disclose the taxable value of all the property in a taxing authority’s jurisdiction. They are the basis for most property tax calculations, and the size of the tax roll therefore can have a huge influence on the operating budgets of the taxing authority. Tax rolls also usually disclose the owner of each piece of property, a description of the property and other details.
Seen and Heard
What made you want to look up property tax? Please tell us where you read or heard it (including the quote, if possible).