Property Tax Terms and Definitions
Property tax terms can become overwhelming. Use our property tax glossary to better understand the nuances of contesting your property tax bill.
Glossary
Ad Valorem TaxA tax based on the assessed value of real or personal property. Property taxes are a type of ad valorem tax.
AppealA formal request to review and possibly change a property’s assessed value or tax liability.
AppraisalA professional estimate of a property's market value, often used to determine assessed value.
Assessed ValueThe dollar value assigned to a property by a public assessor for taxation purposes, typically a percentage of the property's market value.
AssessmentThe process of determining the value of a property for tax purposes.
Assessment CapA limit on how much a property's assessed value can increase from year to year, regardless of market value.
Assessment RatioThe ratio of assessed value to market value, used to calculate property tax liability.
AssessorA public official responsible for determining the value of properties for tax purposes.
Board of EqualizationA local or state body that hears appeals from property owners who dispute their assessments.
Capped ValueA value limit placed on how much a property's assessed value can increase annually, used in some jurisdictions.
Delinquent TaxesTaxes that have not been paid by the due date and may incur penalties or interest.
DepreciationA decrease in property value over time due to wear and tear, often used in appraisals to lower assessed value.
Eminent DomainThe right of a government to take private property for public use, with compensation to the owner.
EqualizationA process that ensures uniform property assessment levels across different jurisdictions or property types.
ExemptionA reduction in assessed value or tax liability granted based on specific criteria, such as age, disability, or veteran status.
Fair Market ValueThe price a willing buyer would pay a willing seller for a property in an open market.
Homestead ExemptionA reduction in taxable value granted to homeowners on their primary residence to reduce property tax liability.
Improvement DistrictA designated area where property owners pay additional taxes to fund local infrastructure improvements.
ImprovementsAdditions or changes to land or buildings that may increase the property’s assessed value.
In Rem ForeclosureA legal process where a government takes ownership of a property due to unpaid taxes, without pursuing the owner personally.
Land ValueThe portion of a property’s value attributable to the land alone, separate from any buildings or improvements.
Market ValueThe price a property would sell for on the open market under normal conditions.
Millage RateA tax rate expressed in mills per dollar of assessed value, where one mill equals one-tenth of a cent ($0.001).
Parcel NumberA unique identifier assigned to a parcel of land by the local tax assessor’s office.
Personal Property TaxA tax on movable property such as vehicles, equipment, or business inventory, distinct from real estate tax.
Property ClassificationA designation (e.g., residential, commercial, industrial, agricultural) used to determine how a property is taxed.
Property Tax FreezeA program that prevents property taxes from increasing for eligible individuals, such as seniors or disabled persons.
Real PropertyLand and anything permanently attached to it, including buildings and structures.
ReassessmentA periodic revaluation of property by the taxing authority, which may increase or decrease the assessed value.
Rollback RateThe tax rate that would generate the same total revenue as the previous year, excluding new property additions.
Special AssessmentAn additional charge on a property to fund specific public improvements, such as street paving or sewer systems.
Tax AbatementA temporary reduction or elimination of property taxes, typically used to encourage development or revitalization.
Tax CertificateA document sold to investors that entitles them to collect delinquent property taxes and potentially acquire the property.
Tax CollectorAn official responsible for billing and collecting property taxes on behalf of local governments.
Tax LevyThe total amount of money a taxing authority requires to be raised from property taxes in a given year.
Tax LienA legal claim by a government entity against a property for unpaid taxes, which must be satisfied before the property can be sold.
Tax RateThe percentage or millage applied to the assessed value to calculate the property tax owed.
Tax SaleThe forced sale of property by a government entity to recover unpaid taxes.
Tax YearThe calendar or fiscal year for which property taxes are levied and collected.
Taxable ValueThe value of a property subject to property tax, often calculated as assessed value minus exemptions.
Truth in TaxationLaws requiring public notice and hearings when a taxing authority proposes to increase tax revenue beyond a set threshold.