The Difference between Property Tax, Personal Property Tax, and Real Estate Tax?

Property tax and real estate tax are more or less the same things. The Internal Revenue Service makes use of the term “real estate tax” while people name it “property tax”. Property tax is a term that is not recognized by the IRS. Anyways, property tax or property tax is imposed on the immovable real estate. This means that it is imposed on structures and land that are attached permanently to the ground like land, building, and house. In case you are the owner of a house, you need to pay real estate tax to your tax assessor directly or in the form of monthly mortgage payments indirectly.

What is Personal Property Tax?

Personal property tax is a sort of annual tax that is imposed on movable property like RVs, mobile phones, planes, boats, and vehicles. Personal property tax is a portion of the vehicle’s license or registration fee based on the vehicle’s value. The terms real estate tax and property tax are used in an interchangeable manner. However, both these terms are not the same thing. It is important for you to know the difference. Homeowners are quite familiar with the real estate tax, and this is because it chucks a huge amount of their money annually. But, many people are not aware of the fact that property tax is not same as real estate tax.  This confusion is because property tax is the term that is used for denoting personal property tax and real estate tax.

What is Real Estate Tax?

Real estate tax is the tax that a homeowner needs to pay on the assessed value of his or her home. It is necessary to determine the fair market value of the house for determining the amount of money that an individual needs to pay as real estate tax. Post this, the local office multiplies the assessed market value of the house by a predetermined percentage and thus comes up with the tax assessment value.

What is Property Tax?

Proper tax is a term that encompasses some things including personal property and real property. Real estate is an inclusion of improvements and land and the tax that is paid is a real estate tax. This is the reason why people use the terms property tax and real estate tax interchangeably. Apart from real property, property tax also includes personal property defined as the things that are moveable.