THE DIFFERENCE BETWEEN REAL ESTATE AND PERSONAL PROPERTY TAXES

What Are Real Estate Taxes?
The government imposes real estate taxes annually on immovable land, also known as real property. Simply put, immovable land is property or ground that cannot be moved. It usually refers to houses, buildings, or pieces of land.
These taxes go to the state or local governments to fund schools, community programs, infrastructure, and other projects. Either a municipal tax assessor or an escrow account, which is a part of your monthly mortgage payments, and it can be used to pay real estate taxes.
Property taxes are another name for real estate taxes. This is because both terms can be used interchangeably. The only situation where a distinction should be made is with regard to personal property.

The Personal Property Tax: What is it?
Personal property tax and property tax are two different things. Your movable assets, including vehicles, boats, recreational vehicles, and aircraft, are subject to personal property taxes. The portion of your annual auto registration that is based on the vehicle’s value is one kind of personal property tax.
This tax must be paid by the state or local governments. In certain jurisdictions, you might not be required to pay personal property tax. In those jurisdictions that require it, is usually due each year when filing tax returns. Personal property taxes are usually used to fund public works projects like schools and roads.

Real estate taxes, property taxes, and personal property taxes
So, do real estate taxes and property taxes have the same meaning? In summary, yes. Property taxes and real estate taxes are synonymous when referring to immovable assets, like a home. However, personal property taxes have a different meaning.

These concepts, contrast and compare in the following ways:

• Levies on immovable property, commonly referred to as real property, are referred to as both property taxes and real estate taxes.
• Levies on moveable property, such as cars, boats, and airplanes, are referred to as personal property taxes.
• While customers frequently refer to real estate taxes as “property taxes,” the IRS uses the term “real estate taxes.”  
• Real estate and personal property taxes are paid at the municipal or state level.
• Both real estate and personal property taxes are typically used to finance community initiatives. Roads, infrastructure, and schools are a few examples.

Are Automobiles Listed as Real Property?

When a vehicle is fastened to the ground, as is the case with a mobile home secured with steel straps, it is regarded as real property. Real estate taxes are due on this immovable property.

However, a vehicle isn’t regarded as real property if it isn’t anchored to the ground, such as the car you drive to work. Vehicles that can be moved are taxable as personal property. These mobile homes that are not fixed to the ground are examples of these movable “vehicles.”

Conclusion

Although the two types of taxes are based on percentages of assessed value, their implementation and total tax burden differ significantly. It emphasizes how crucial it is to conduct due diligence before deciding on a state or municipality to buy real estate in order to get the best return on investment and the lowest taxes.