Property Tax Definition

Property tax is a tax assessed on property, usually annually, and usually based upon the fair market value of the property being taxed (in other words, it is an ad valorem tax). In the US, the most common form of property tax is an annual tax assessed on real estate and structures. Property tax is often expressed as a percentage (1/100) or permille (1/1000).

Property tax is often confused with special assessment taxes, as the two are often combined into one annual tax notice. Most property taxes are assessed by municipal or county governments. Many jurisdictions impost a personal property tax on objects such as automobiles, boats, and other durable goods.