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What Is Property Tax?

Property tax payments often are due annually.
Building a home on vacant land can result in higher property taxes.
School districts usually receive a large portion of property tax revenue.
Property taxes must be paid on storefronts even after they have been vacated.
The money gathered from property tax is often used to financially support emergency response workers like paramedics.
Property taxes are still in effect for homes, even if the owner is trying to sell it.
A personal property tax is assessed on possessions like motorcycles.
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  • Written By: Sherry Holetzky
  • Edited By: Niki Foster
  • Last Modified Date: 18 October 2014
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Property tax is a levy issued by a government on a person's real or personal property. The property is assessed to give it a value, and then that value is taxed. The amount of tax owed is determined by multiplying the fair market value of the property by the current tax rate.

The amount taxed on a given property may change over time based on a reassessment of the property's value. Typically, property tax is not increased as the value of the home naturally increases; the value of the tax generally remains based on the value of the property at the time it was purchased. Major improvements, however, like building an addition to an existing home, or building a home on a vacant piece of land can trigger reassessment and therefore an increase in the tax levied. Laws vary by jurisdiction; to be sure of those laws that apply to a particular property, one should consult the appropriate regulatory board or a professional in the field.

Property tax payments are due annually in most cases, although the annual amount is frequently divided into periodic installments. This may mean quarterly payments, which is common with commercial property. With homes, it is often charged in monthly installments, which may be added to mortgage payments.

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This tax is known by other terms as well, sometimes referred to as a realty tax because it is most often levied against real estate. It is also called an ad valorem tax, which simply means the tax rate is established by the value. There are also different kinds of taxes, such as personal property tax. This is usually assessed and charged separately from taxes on real property and includes personal possessions like automobiles, motorcycles, campers and boats.

Local governments such as cities and counties derive revenue from property tax. This revenue is generally used for government administration and expenses for first responders such as law enforcement officers, firefighters and paramedics. It is also used to fund local courts and helps pay for services including community programs, parks, civic centers, libraries and schools. Quite often, school districts receive a large portion of the revenue.

Typically, the state also collects a portion of the tax revenue. In the United States, the power to levy and collect any type of property tax is considered a state's rights issue. It is not readily recognized as one of the powers of the federal government.

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Discuss this Article

anon926060
Post 25

mrOwner, it is my experience that you will not be able to take your 'commercial' property off the tax rolls and claim it as private property - PROVIDED that you have accepted some benefit/privilege of the State. Such as, a LICENSE to DO BUSINESS and or you are INCORPORATED (rather than Private Trust). This isn't just an issue for you to determine for Land, but everything you do. Apply, Submit, Accept a Privilege or Benefit from the Gov and you will be COMPELLED to duty of some sort, by contract.

Others are spot on with information on how to DEFINE property and how to cancel joinder and terminate contracts, but I thought I would add in the WHY YOU MUST, prior to attempting such acts, or you could land yourself in jail.

anon335314
Post 23

It's pretty much a big scam. The county I live in has a property tax for homes and vehicles. The thing is, if the county does not own these items, what gives them the right to tax me? It's pretty much because there are laws that say that's how it works.

If you ask me, it makes no sense and it should be illegal. I don't tax my neighbor for his parking spaces I don't own, and it's because I don't own them that I don't have the legal right to tax him for them. The government gets to tax me because they passed a law that says so.

anon314812
Post 22

I see no mention anywhere about liability. Where are the laws that establish liability for property taxes? If there is no liability, nobody is required to pay them.

anon294772
Post 21

I don't own my home; the bank owns it. I'm all for the bank paying the tax on this property that I'm making payments on. How about the bank pays the tax on the portion of the money I still owe on the house, and I pay the tax on the portion that makes up the difference between what the "value" of the home is and what is still owned? Yeah? Sounds good to me. See how fair this sounds?

The problem is the government is composed of and run by rich bankers rather than the people. The banks are the ones making the laws here.

anon284169
Post 20

Just wondering if residents are responsible to replace damaged city sidewalks? I live across from a high school and if not repaired, some one might get hurt.

anon158354
Post 18

All governments in all countries are run by thieves and criminals and organized crime, where they say one thing amd do another thing, sort of like feminism, says one thing and does another thing.

Do not trust any government in any country because they are all corrupt. The best government is no government. It is an ideal life to live with no government. The best government is no government.

anon145197
Post 17

What you must do is go to wherever your property is listed, county recorder, or whatever your city calls it. Then you must figure out the four codes they have for the four types of property descriptions: agricultural, industrial, residential, and private. This will be the hard part. Once this is figured out, you go see the county recorder clerk. Then you basically ask them to reclassify your property as private. After all, it is your property.

Give them a week to make the changes. If it hasn't been changed, then you might want to bring up to the clerk possible legal action. If the clerk is wise they will comply, as they really do have very cushy jobs and decent pay, and the last thing they want is to lose that pretty secure job they have with the city, if some sort of litigation were to ensue and they are connected to it.

If property classification is changed as requested, you will never again get another property tax bill. You see, private property cannot be taxed! That's why they call your property and have it recorded as residential. It's not as good as Allodial title, but in my view, the next best thing!

After all, people, how do you think churches get away without paying property taxes? They are classified as private property!

anon144301
Post 16

We need to figure out a way to turn our property back to private property! What's so illegal about this, is that it looks as though fraud was committed without our knowledge. When I purchased my home/property, I had no clue that all I was doing was still renting. I'm wondering if we can sue for fraud?

anon135396
Post 15

So, when exactly does the property/land become real estate? Is there a way to turn it back into private property? Did we unwillingly enter into some form of contract in which we allowed for the classification of our property to become real estate and not private anymore? Thanks! --VR

anon113569
Post 14

@anon5522: Seems the real issue is Allodial title. Let's say you purchase in full land and a home. You are entitled to a Grant Deed (simple fee).

Homeowners and land owners need to educate themselves about Allodial titles which is the true title of ownership. Look up Allodial title.

Plus, people need to educate themselves about the classifications of their homes and lands. The tax assessor uses these classifications: agriculture, residential and business for taxation purposes. What a residential property owner needs to do is to change their properties classifications to private property. Private property cannot be taxed. Good luck with the research. I am just starting to learn.

anon104132
Post 13

If you must pay someone money on a regular basis to avoid being evicted from your home, are you truly a homeowner? What if that same organization that you pay money to under threat of eviction also controls your use of the property?

What if they forbid you to run a store from your home, or allow a second family to move in, and enforce such with zoning laws? What if they also prevent you from making any significant modifications to the property without their written permission, in the form of PERmit requirements? Is the home really yours?

Control = ownership.

anon96941
Post 12

Why do they even have a right to tax property anyway? I mean, it's your property, and no part of it even belongs to the county, state or country. It's yours and yours alone, let alone think they can auction something they don't own. that's bogus.

anon77792
Post 11

For anon40776: How do you pay rent if the owner's location is unknown?

anon64729
Post 9

what is the difference between property tax and county tax?

anon51813
Post 8

Why do residents of mobile home that rent the land have to pay ad valorum tax? Could anyone out there please enlighten me? Thank you.

anon48304
Post 7

I own a house in Texas. I am carrying the note for the couple who is buying the house from me. They have been paying the taxes for four years now. Can they stop making monthly payments to me and claim ownership because they are paying the taxes?

anon40776
Post 6

The property I am currently renting from a homeowner owes taxes and said property is currently up for auction next month. What do I need to do? Move out? Continue to pay rent? The home owner is somewhere in Australia and no one seem to be able to contact them now.

anon36071
Post 5

What method is best method for corporations to evaluate asset value.

anon34905
Post 4

for aron5522 -- Obviously an owner is not some one who must make payments to the non owner or the non owner will take possession of the property.

That the state retains ownership of everybody's property is an undeniable fact. That, homesteaders are not homeowners and that they are just paying rent to the state is an undeniable fact.

The owner is the one with the right to acquire possession of property when the renter fails to make payment. That the state has this right because of property tax is obvious.

If you had no idea it was the government demanding payment and not a landlord the only difference you would be able to discern from conventional rent would be the terms of your rental agreement. All the material facts that determine who the owner is and what a renter is remain the same. All arguments which try to prove that property tax is not the logical equivalent of rent are based on the justification of the tax and are irrational from the prospective of what is ownership and what is a renter.

If we are to believe that the state is not the owner we would have to conclude that an owner is someone who has to make payment to someone else or lose possession of their property. This is absurd and a complete contradiction of what is ownership.

Our government needs to quit lying to the people and just come out and admit they are unwilling to let the people own their homes.

You can’t tax ownership any more than you can make the earth flat by religious decree. What one does when they claim to tax ownership is make ownership into that which it is not. Redefining ownership from that which gives you freedom from debt to that which puts you in eternal debt is ludicrous. Property tax, the so called tax on ownership, is really a perpetual tax on the government assessed monetary value of a piece of property, and the only relationship this has with ownership is that it prohibits it. Every rational person in the world understands this and that our so called “authorities” are incapable of seeing this makes them into members of yet another “flat earth society”. Taken from the book “If we free the slaves who will pick the cotton” written by Tomas Real

mrOwner
Post 3

So, I've paid off my commercial buildings. How do I get off the tax rolls and be recognized as "PRIVATE PROPERTY" instead of "real property" ?

anon18634
Post 2

"Real estate" or "real property" is not "private property." "Private property" is land owned absolutely by an individual in perpetuity while the owner of "real estate" is actually only a "tenant" who has an ownership interest in land less than title for a time. Land that is truly an individual's "private property" cannot be taxed.

The assessment laws only require "real estate" to be assessed and the owner of record thereof on a certain date to be taxed.

anon5522
Post 1

I have a question regarding land ownership...real estate in a residential neighborhood. I was told that if a person pays property tax, they really do not own their own land. They can own the house and any property ON THE LAND, and they can do anything they want with it or to it, but unless the person has an ALLODIAL TITLE to the land under their house, they are really only renting their land. I was told that we really owned our property free and clear, we would not need to pay property tax, and we would not be limited to what we could do on our property. Is any of this true? Do we actually OWN our residential property or don't we?

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