Property Tax: Definition, What It's Used for, and How It's Calculated

What Is Property Tax? A property tax is an annual or semiannual charge levied by a local government and paid by the owners of real estate within its jurisdiction. Property tax is an ad-valoremtax, meaning the amount owed is a percentage of the assessed value of the real estate. Property tax receipts are the main source of revenue for most local governments in the U.S. They are used to fund schools, police and fire departments, road construction and repair, libraries, water and sewer departments, and other local services that benefit the community. In common usage, property tax refers to a tax on immovable possessions like structures or land. Some local jurisdictions also assess property taxes on moveable property such as vehicles and industrial equipment.Key TakeawaysProperty tax is based on the assessed value of the property, which can be real estate or tangible personal possessions.Property tax revenue is the primary source of funding for local services in the U.S.Property tax rates...