What Is The Difference Between Real Estate Taxes And Property Taxes?

When you are young, you go to school to learn about literature, science, maths, and more. You quickly make your way to college or university, where you study a specific subject like English Politics or even STEM. Once that’s over, you step into the practical world and get a job.

For most people, that’s when the learning begins. You learn about all the things you didn’t know of, things you’ll be needing, such as a bank account, mortgage, savings accounts, stocks, and more. These are the things that you don’t learn about at school nor does anyone tell you, so you are basically on your own. However, thanks to the internet, you get all the information that you need. That being said, since tax season is coming up, now is the perfect time to learn the difference between real estate taxes and property taxes. 

Nataliya/Pexels |Unlike an IKEA table, Life does not come with a ‘How To’ manual

What Is Real Estate Tax?

A real estate tax is defined as the tax that is applied on any land, property, building, or anything related to real estate. This real estate tax is calculated from the percentage generated by the tax value of the said property. In some places, the profit is generated from the real estate taxes and is used for local maintenance, including snow removal, fixing potholes, road maintenance, school development, and more.

Energepiccom/Pexels | In simple words, real estate taxes are the annual taxes that are paid by the owner which are based on the assessed value of their property.

What Is Property Tax?

Now that you know what real estate tax is all about, it’s time to learn about the property tax, which is a tax placed on privately owned objects that are movable. These are jewelry, furniture, artwork, boats, cars, RVs, farm equipment, machinery, and the list continues. And, just like the real estate tax, the property tax is also set according to the value of the item being taxed.

What Makes These Two Taxes Similar?

Generally, people confuse the two since a property tax could easily pass off as a real estate tax since real estate is technically your property, but this is not correct. There are a few similarities that come with the two taxes, such as:

  1. Both of these taxes are paid to the authorities that are overlooking the taxing.
  2. Both of these taxes go directly to the government.
  3. They are generally used for developmental projects, and they contribute to the economic growth of the country 

There are many ways to estimate a real estate tax and a property tax, but why go through the hassle of doing it by yourself when you can get the service of financial advisors who are going to guide you through the process of assessing your taxes and then helping you out on how to pay those particular taxes.

Olya/Pexels | The last thing you would want to do is to accumulate taxes

Wasn’t that simple? Now you know what property tax and real estate tax are.

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