| Tax is money paid to government on a product, activity or income. It is money paid to government other than for goods and services. Property tax is tax on owned land and housing. Property tax can also be defined as the taxes paid on privately owned properties and are based on local tax rates and assessed property values.
Under property tax system, the state requires an appraisal of the monetary value of each property and tax is paid in proportion to that value. Forms of property tax vary between country and jurisdictions. There are two different forms of taxation: one relies upon the fair market value of the property and other relies upon a special enhancement called benefit. Property Tax rate is given as percentage and may expressed as permille. For calculating the property, authority will multiply the assessed value of the property by mill rate and then divide by 1000.
Property taxes are being accumulated by states and the federal governments and serves as a major source of income. Property tax will include bonds approved by voters and other parcel assessments. Levy is a kind of property tax with a variable rate. Levies are also voter-approved and may be limited by state laws.
Property tax is divided into two categories real estate property tax and personal property tax. Real estate property tax is anything related to piece of land and personal property tax is one that is not related to piece of land. When an assessment has been performed, property tax are determined. Assessments are carried out on regular basis by municipalities, towns or cities. Trained assessors are hired to evaluate each taxable property and then at an individual value. After evaluation tax rate is applied on a portion of that value.
Property tax is beneficial and advantageous as it is cheap to administer and transparent . It is very difficult to avoid or evade, the public understand the concept of market value and therefore appreciate the basis of assessment. There is a good correlation between ability to pay and assessed value. It is very well suited as a source of locally generated revenue for local governments and revenue is predictable.
Property tax is used as a source of local revenue and support for other functions. Property tax plays an important role in decentralization and autonomy of local government. Property tax is also introduced in rural ares because it provides a revenue base for a single function authorities, encourages the economic use of land, tends to reduce land and property prices thus facilitating access to land.
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