Property taxes are a type of ad valorem tax that an owner of a real estate property must pay to the varying forms of government within the district in question. The owner pays the property tax in accordance with the value of the property; this percentage is determined through a property appraisal which is a system that evaluates the worth of the property in relation to the surrounding area.
A property tax is a fundamental real estate tax that can is imposed by the local jurisdiction in which the property is located. Within real estate taxes, or more specifically the property tax, lays three subcategories or types of property that are taxed. Land, Improvements made to the land that are immovable and personal improvements made to the land that are movable. When evaluated and combined, the common terms associated for real estate taxes are: real estate, real property or realty.
The property tax is instituted by a taxing authority within the local government for where the property resides. The forms associated with property taxes will vary based on jurisdiction or town; however, the uses typically for tax property revenue are somewhat universal.
All revenue collected from the local town government will be redistributed into the community in the form of public services. Public education, law enforcement, town parks, and construction of roadways are distributed through local governments through funding collected from real estate taxes. In order to properly levy the property tax, a town must perform proper appraisals of the property’s true value; the property tax will be assessed in proportion of the appraised value.