| Property tax is an ad valorem tax that | | | | collected by an official other than the |
| an owner of real estate or other | | | | assessor. |
| property pays on the value of the thing | | | | The assessment of an individual piece of |
| taxed. The taxing authority requires and | | | | real estate may be according to one or |
| or performs an appraisal of the monetary | | | | more of the normally accepted methods of |
| value of the property, and tax is | | | | valuation (ie income approach, market |
| assessed in proportion to that value. | | | | value or replacement cost). Assessments |
| Forms of property tax used vary between | | | | may be given at 100 percent of value or |
| countries and jurisdictions. | | | | at some lesser percentage. In most if |
| Canada | | | | not all assessment jurisdictions, the |
| Many provinces in Canada levy property | | | | determination of value made by the |
| tax on real estate based upon the | | | | assessor is subject to some sort of |
| current use and value of the land and | | | | administrative or judicial review, if |
| this is the major source of revenue for | | | | the appeal is instituted by the property |
| most municipal governments in Canada. | | | | owner. |
| While property tax levels vary between | | | | Ad Valorem (of value) property taxes are |
| municipalities in a province there is | | | | based on fair market property values of |
| usually common property assessment or | | | | individual estates. A local tax assessor |
| valuation criteria laid out in | | | | then applies an established assessment |
| provincial legislation. There is a trend | | | | rate to the fair market value. By |
| to use a market value standard for | | | | multiplying the tax rate x the assessed |
| valuation purposes in most provinces | | | | value of the property, a tax due is |
| with varying revaluation cycles. A | | | | calculated. These taxes are collected by |
| number of provinces have established an | | | | municipalities such as cities, counties, |
| annual reassessment cycle where market | | | | and districts in many locations in the |
| activity warrants while others have | | | | United States. They fund municipal |
| longer periods between valuation | | | | budgets for school systems, sewers, |
| periods. | | | | parks, libraries, fire stations, |
| United Kingdom | | | | hospitals, etc. |
| There is currently no ad valorem tax on | | | | After determining a budget at the |
| residential property. Two former systems | | | | municipal level, a legislative |
| were dropped because of their extreme | | | | appropriation determines how the monies |
| unpopularity. They were Schedule A | | | | will be collected and distributed. After |
| income tax, a central government tax | | | | that, a tax authority levies the tax. An |
| that was levied on the imputed rent, | | | | appeal is permitted. Equalization is |
| that is the rent that owner-occupiers of | | | | then considered by a board of equalizers |
| land would have been receiving from a | | | | to assure fair treatment. Then a tax |
| tenant had they not been living in the | | | | rate is determined by dividing the |
| houses they owned. However, actual (as | | | | municipal budget by the assessment role |
| opposed to imputed) rent is still | | | | of that municipality. Your tax rate x |
| subject to income tax under Schedule A; | | | | the assessed value of your property |
| Rates, a local government tax that was | | | | determines the tax you owe. |
| levied in proportion to the assessed | | | | Some jurisdictions have both ad valorem |
| value of property. This was replaced | | | | and non-ad valorem property taxes, the |
| under the Thatcher government by a poll | | | | latter representing a fixed charge |
| tax, which proved even more unpopular | | | | (regardless of value) for items such as |
| than the rates, and was replaced by a | | | | street lighting and storm sewer control. |
| mixed council tax which combines | | | | In the US, another form of property tax |
| elements of property tax and a poll tax. | | | | is the personal property tax, which can |
| Rates are still (2006) levied on | | | | target |
| business property, though some classes | | | | automobiles, boats, aircraft and other |
| of business are exempt. | | | | vehicles; |
| Netherlands | | | | other durable goods (though typically |
| Property tax (Dutch: Onroerend goed | | | | household goods and personal effects are |
| belasting or Onroerende zaak belasting | | | | exempt); |
| (OZB) ) is levied on homes on a | | | | inventory; |
| municipal basis in two parts: for the | | | | intangible assets such as stocks and |
| one who lives in the house and one for | | | | bonds. |
| the owner of the house. When one has a | | | | In some states, it is permissible to |
| rental home, he/she should only pay the | | | | separate the real estate tax, into two |
| living part of the tax. The last years | | | | separate taxes -- one the land value and |
| lots of concern are because of the | | | | one on the building value. |
| annual raise of this tax by more than | | | | Personal property taxes can be assessed |
| 10% in some municipalities. As of 2005, | | | | at almost any level of government, |
| there is a Parliament proposal to retain | | | | though they are perhaps most commonly |
| only the owner's part of the property | | | | assessed by states. |
| tax and to raise it annually not more | | | | Hong Kong |
| than the inflation rate. | | | | In Hong Kong, there is a kind of tax |
| United States | | | | named property tax, but it is not an ad |
| In the United States, property tax on | | | | valorem tax, it is to be classified into |
| real estate is usually assessed by local | | | | Income tax. |
| government, at the municipal or county | | | | According to HK Inland Revenue Ordinance |
| level. The assessment is made up of two | | | | IRO s5B, all property owner shall not be |
| components -- the improvement or | | | | subject to this tax, unless the HK |
| building value and the land or site | | | | property owner has received a |
| value. A tax assessor is a public | | | | consideration, the example is rental |
| official who determines the value of | | | | income for the year of assessment. The |
| real property for the purpose of | | | | property tax shall be computed on the |
| apportioning the tax levy. An appraiser | | | | net assessable value at the standard |
| may work for government or private | | | | rate. |
| industry and may determine the value of | | | | Year of Assessment |
| real property for any purpose. | | | | The period of assessment is from April |
| Tax assessor offices maintain inventory | | | | 1st to March 31st of the following year. |
| information about improvements to real | | | | Net assessable value |
| estate. They also create and maintain | | | | The formula is: |
| tax maps. This is accomplished with the | | | | Net assessable value = 80% of Assessable |
| help of surveyors. On tax maps, | | | | value. |
| individual properties are shown and | | | | HK property tax payable = Net assessment |
| given unique parcel identifiers. The tax | | | | value X Property tax standard rate |
| maps help to ensure that no properties | | | | Assessable value = Rental income + |
| are omitted from the tax rolls and that | | | | Premium + (Rental bad debt recovered - |
| no properties are taxed more than once. | | | | Irrecoverable rental) - Rates paid by |
| Real property taxes are usually | | | | owner. |