Property tax facts for kids

A property tax is a payment on property that its owner must make. This tax is set by the local government where the property is located. The money collected can go to national, state, or local governments. Sometimes, more than one government can tax the same property. This is different from a rent or mortgage payment, which is based on a percentage of the rent or mortgage value.

Property can be many things, like land, buildings, personal items, or even ideas. Real property (also known as real estate) includes land and any buildings or structures built on it. To figure out the property tax, the government usually checks the value of each property. The tax is then based on this value. How property tax works can be different in various countries and areas. Real property is often taxed based on how it's used. This is called classification.

Properties in different groups are taxed at different rates. For example, homes, businesses, factories, and empty land might all have different tax rates. In Israel, for instance, the property tax for empty apartments is twice as much as for apartments where people live. In British Columbia, Canada, a special tax on homes was started in 2019 to discourage people from buying homes just to leave them empty.

A special assessment tax is sometimes confused with property tax, but they are different. A property tax is based on the value of the property. A special assessment tax is used when a property gets a special benefit, like a new road built nearby.

The property tax rate is often shown as a percentage. It can also be shown as a millage rate or mill, which means an amount of tax per thousand currency units of property value. To figure out the property tax, the government takes the value of the property and multiplies it by the mill rate. Then, they divide that number by 1,000. For example, if a property is worth $50,000 and the mill rate is 20 mills, the property tax would be $1,000 per year.

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