by Roger Chartier:
Property Tax is the
tax that you pay on real estate and property to any governing body that requires it.
That was obvious. Property tax is most often thought of as a city or town tax on real estate.
The land and improvements such as a house or building are assessed to be of a certain value.
The tax rate is a percentage per thousand dollars of that value in the USA and in many other countries.
It can be per thousand Rupees or Dinars or what have you.
Each unit is called a "mill".
If your house and land are worth $100,000, and your tax rate is 20 mills, you would be taxed $2,000 per year.
After your mortgage is paid,
You still have that real estate tax levied on your property so if you own it you will always have to pay something - remember "Death and Taxes" you can't avoid it.
Most jurisdictions seek quarterly tax payments and most often if you have a mortgage the bank will handle the tax payments and homeowners insurance as part of your mortgage bill.
They add to the principal and interest to reserve an escrow each month for tax disbursements and insurance.
This makes them feel safe and secure that the tax gets paid so that the government will not have reason to put a tax lien on the property.and that the property is insured to protect them in case of a loss.
Too expensive to keep In some cases if you inherit a piece of real estate taxes and insurance may be so high that you can't even afford to keep it.
Example - image on the right.
Some people have taken places such as that and turned them into a business such s a Bed and Breakfast and live in a part of the house or estate and use the rest for a source of income.
If you had bought John Lennon's childhood home on Menlove Avenue in Liverpool UK before the government got a hold of it, or say Elvis Presley's estate, or Michael Jackson's Neverland Ranch you could have charged for tours and still get to sleep in the same bedroom in which he slept.