Property Tax Law

Taxes are classified as either specific or ad valorem. Specific taxes are of a fixed amount based on a number or standard of weight or measurement. Ad valorem taxes are based on a fixed proportion of the value of a property. They require an appraisal of the taxable subject matter's worth. General property taxes are mostly of this type. Ad valorem property taxes are based on ownership of the property and are payable regardless of whether the property is used and whether it generates income for the owner (although these factors may affect the assessed value).

Income tax meets the broadest definition of a property tax. The term, however, is often limited to taxes based on real property.

The most frequent use of property taxes in the U.S. is by municipal governments, authorized to generate necessary revenue in this fashion under state law.

The content on this page was developed in partnership with the Legal Information Institute, Cornell Law School.