Real Estate and Personal Property Taxes

Of all the taxes that the government demands that you pay, the two taxes that easily confuse people are the real estate and personal property taxes. Let us see what these are.

Real Estate

Real property or real estate is a term that is used to mean a piece of land and anything that is attached or fixed to it. These may include buildings and landscaping. But not so are the furniture found inside the building. However, when it comes to built-in fixtures like bookcases or built-in appliances like dishwashers, kitchen cabinets and other paraphernalia, they are generally considered part of the real property.  

Personal Property

The general rule is that anything you own other than land and things attached to it is personal property. "Chattel" and "movables" are two other terms used. These include automobiles, jewelry, electric and electronic devices, art, movable furniture and other modes of transport like boats.  Livestock fall in the category of personal property but in many instances, it is usual for them to be sold along with real estate.

Real Property Taxes

Real estate taxes, like Luxury Real Estate London taxes are levied according to the value of the property under question. Federal government does not have a part in the collection of this tax. It is rather the prerogative of state governments, city administrations, school districts and other relevant local authorities. "Split Roll" is a term used to mean the separate tax structures for different purposes. Commercial property, business holdings or residential property all have different taxes levied on them. In a state like California property taxes cannot be raised beyond a certain point annually. This is ensured by a law they call "Proposition 13".

Personal Property Taxes

Retail purchases, automobiles, business equipment, boats or livestock all come under the purview of personal property taxes. The local and state governments assess the taxes and collect them. Most of the time, you do not pay it separately. For instance, when you purchase something, your bill comes with sales tax included in it. In effect, you have paid tax on your property already. Not included in this method of tax collection are registration fees in case of car or boat which have to be collected annually. Services do not generally fall under sales tax regime.

Useful Tips

It is always good to know about tax norms if you own a property, whether real estate or personal. Find out the tax structures applicable in each case. You should find out how a figure is arrived at in respect of a particular item of your property. Know beforehand when the tax is to be paid and pay up to avoid clash with law which may entail paying of penalties and interest for the unpaid amount of money. You may as well find out about the fine amounts and the rate of interest you would have to pay in case you do default. Keep in mind always that your defaulting your payment of taxes may result not only in your properties being confiscated but also sold without as much as by your leave by the concerning authorities.

Real Estate and Personal Property Taxes to Estate Planning and Taxes