The term “property tax” sounds familiar, but do you know what it is? Have you paid property tax before. This kind of tax is levied when an individual or a legal entity purchases real property, such as land and fixed buildings. Sometimes we have to pay property tax on our personal property such as cars and boats as well.
In general, how much taxes you should pay is determined by the value of your property. The local government will do the math. Based on the current market price of your property, they will figure out a tax rate. The tax rate will be renewed every year.
Since every state has its own laws and jurisdictions, so the tax rates are different from states. Therefore, before you purchase a property, you need to figure out the applicable tax laws. For example, if you wnat to buy a house in New York while you are working in New Jersey, you should pay the property tax according to the laws in New York.
The property tax is different from real estate tax. You may have heard people use these two terms interchangeably. Well, it can be true to some extent. Real estate tax belongs is a type property tax, however, property tax has broader ranges. As mentioned above, you might pay property taxes on your cars or boats.
People often use the terms property tax and real estate tax interchangeably. And it’s partially true: Real estate tax is a property tax. However, that’s not true the other way around. Not all property taxes are real estate taxes.