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Simple English definitions for legal terms
Property tax
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A quick definition of Property tax:
Property tax is a type of tax that is based on the value of a property. This means that the more valuable a property is, the more tax the owner will have to pay. Property taxes are usually paid to the local government and are used to fund things like schools, roads, and public services. It doesn't matter if the property is being used or not, the owner still has to pay the tax. Property taxes are one of the most common ways that local governments generate revenue.
A more thorough explanation:
Property tax is a type of tax that is based on the value of a property. It is an ad valorem tax, which means that it is calculated as a percentage of the property's value. This tax is payable by the owner of the property, regardless of whether the property is generating income or not.
- A homeowner pays property tax on their house, which is based on the assessed value of the property.
- A business owner pays property tax on their commercial property, which is based on the assessed value of the property.
These examples illustrate how property tax is calculated based on the value of the property. The tax is payable by the owner of the property, regardless of whether the property is generating income or not. Municipal governments in the U.S. often use property taxes to generate necessary revenue.