Tax

What's the difference between Real Estate Tax, Property Tax, and Personal Property Tax?

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What's the difference between Real Estate Tax, Property Tax, and Personal Property Tax?

Homeowners are often confused between real estate tax, property tax, and personal property tax. In case you are willing to buy a property, you should have a detailed understanding of these three types of taxes. To make things simple, here is a simple explanation of these three terms.
Real Estate Tax: Real estate refers to the physical property and can include a building or the landscaping of the property. It includes homes that are constructed in residential plots. The tax code may not include mobile homes, as these constructions are movable. The assessed value of the property is considered in order to determine the tax. This assessment may be made on an annual basis, while certain assessments can also be made at other intervals.

Property TaxAny personal possession that the real estate property does not include is considered to be property tax. Personal property can be of two types, concrete or insubstantial. Concrete personal property includes vehicle, jewellery, boats, PC, livestock and so on. Mobile homes are also considered by the tax agencies, and the owners need to pay for them on an annual basis. On the other hand, insubstantial property includes personal assets that the owners have the right to. Examples of this type of property are stock, bonds or copyright. You can deduct the taxes payable for personal property against the income taxes. However, you need to qualify for the deduction. In these cases, the taxes have to be due annually and in proportion to the value of your personal property.

Personal Property Tax: Property tax and personal property tax may appear similar to you. However, the difference lies in the fact that property taxes are to be paid on an annual basis. On the other hand, personal property taxes are to be paid according to the value of the personal property of an individual. This tax is generally paid on a daily basis, when you make retail purchases. Besides, big-ticket purchases such as business equipment, vehicles and other purchases are also included in this category.
In most of cases, services are excluded from the assessments of personal property tax.
Source : Zricks

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