If you own a home, you’re likely familiar with real estate taxes and may even call them "property taxes." Many people don't realize that these two taxes aren't identical. Real estate taxes are the taxes on the assessed value of your home charged by the municipality in which you own it. Personal property taxes, meanwhile, are the taxes on moveable items you own, such as cars, boats, equipment, and furniture.

Real Estate Taxes

Real estate taxes are annual taxes a homeowner must pay on the assessed value of their house. Every city and state municipality determines how much the real estate tax rate is by multiplying the fair market value of a home by the predetermined percentage in that municipality to arrive at the 🦄✃tax assessment value.

One item that may be taxed as personal property rather than real estate might seem confusing. If the owner of a 澳洲幸运5开奖号码历史查询:mobile home doesnꩵ't own the land the home is on, that mobile home will be considered personal property. If the mobile homeowner owns the land, then the land i🍃s assessed for real estate tax.

✨ Ever hear people complain about the high cost of real estate taxes in their area? This is what they’re referring to, and higher tax rates are often found in large cities like New York or Los Angeles.

The amount of real estate taxes you pay will depend on how much your home is valued at as well as the part of the country you live in. For example, a rural city in Oklahoma likely has a much lower real estate tax rate than a popular big city on one of the💯 coasts or in a major metropolis like Dallas or Chicago.

How Real Estate Taxes Are Determined

Let’s say your house has a fair market value of $350,000 and the predetermined percentage i♊n your municipality is 65%. The tax assessment value of your home is $227,500, or $350,000 x 65%.

If your 澳洲幸运5开奖号码历史查询:local tax rate is 3%, then you would pay $6,825 in real estate tax per year. If your lꦇocal tax rate was higher, say 8%, you’d pay $18,200 on a similarly valued home. Location, location, location.

Property Taxes

Property tax is another name for 澳洲幸运5开奖号码历史查询:personal property tax. Your personal property refers to items that aren’t permanent or items that are movable. For example, your car is personal property and when you register it every year, you’re es🐼sentially paying a property tax on it.

Things li⛄ke boats, planes, campers, RVs, ATVs, farm equipment, and business equipment (e.g., furniture or machinery) are taxed under personal property. Since they’re all moveable, a personal property tax is assessed on their value, similarly to the way your home’s tax value is assessed.

It's interesting to note that mobile homes are taxed as personal property rather than real estate. It is true that people live in them just as they would in a house, but technically, they’re moveable. However, if you own the land 🔯that you have a mobile home on, it would be taxed under real estate ta𒀰xes on its assessed value.

How much you pay for your peꦡrsonal property tax also depends on your city and municipality and the going personal property tax rate, as well as the assessed value of each personal item.

Key Differences

First, the rate of taxes that you pay is different. Real estate taxes are generally much steeper than personal property taxes. Even the cheapest real estate taxes in the country for a modestly valued home can cost homeowners thousands of dollars.

Second, you may be able to 澳洲幸运5开奖号码历史查询:deduct real estate taxes on your home as expenses on your federal tax return if you live in the home and itemize deductions on Schedule A. Personal property taxes may also be deducted if you itemize, but the deductions will be a lot less on a boat or RV than they would on your home and go in a different place on your federal return.

This isn't only because your personal property typically has less value than a home, but also because it’s taxed at a lower rate than real estate taxes.

The Bottom Line

Although they s♎ound similar, real estate taxes and personal property taxes refer to different types of tax. Your municipality charges an amount of money based on the assessed value of your home: the real estate tax. Moveable items—vehicles, business equipment, furniture—are taxed at a d𒅌ifferent rate, the rate for personal property.

Now that you understand the difference between real estate taxes and personality property taxeဣs, you may be less likely to use the terms interchangeably and more apt to understand the tax statements and bills 🔜you receive for each one.