Is Real Estate Tax the Same as Property Tax?

They say only two things in life are certain: death and taxes. However, knowing you owe taxes and understanding your taxes are two very different things. Though taxes can be complicated and confusing at times, we feel it’s important for homeowners to be educated and feel confident in what they’re paying Uncle Sam. At Team French, we often get asked, “Is real estate tax the same as property tax?” The answer is pretty much Yes. Some people use these terms interchangeably, because they are pretty much the same. Let us explain. 

What is Real Estate Tax?

Real estate tax is the annual tax paid on immovable property such as your house and land. Most people refer to this as property tax, it is a confusing misnomer and is sometimes confused with personal property tax on personal property which can also come into play when buying and selling real estate. More accurately called property tax, the amount you owe annually is determinant ad valorem. This is a Latin phrase meaning it is calculated based on its value.

Therefore, the more your house and land are worth, the more real estate or property taxes you pay, and vice versa. This tax is paid to your local government. Depending on how your mortgage was set up, you may pay the real estate tax in a lump sum on an annual basis or it may be calculated into your monthly mortgage payment. 

What is Personal Property Tax?

On the other hand, personal property taxes are paid on moveable property. This includes cars, RVs, mobile homes, boats, planes, and more. It can be confusing when people shorten the name of personal property tax to just property tax.

It is important to use the correct terms to avoid misunderstanding. Personal property tax is also calculated ad valorem and paid annually. When it comes to personal property tax, exemptions are possible based on use, circumstance, age or other reason. Always check with your local tax commissioner or a tax advisor for more guidance. 

Why Do We Pay These Taxes?

We can all agree that paying taxes is no fun. So, keep in mind real estate and private property taxes are one of the main forms of revenue for the local and state government. This means paying these two annual taxes helps with funding local improvements that you will enjoy such as better roads, schools, parks, and more. All of these things contribute to making the Gold Country the beautiful place we love to live, work, and play.

Would You Like Tax Help?

At Team French, we have an extensive network of real estate professionals who are trusted and proven. We can connect you with some of the best tax professionals in the Gold Country that specialize in real estate tax and personal property tax. Additionally, you can visit the government websites for Calaveras, Tuolumne, and Amador counties to learn more about your real estate and personal property taxes.  

Have other real estate questions? At Team French, we specialize in all things real estate and all things Gold Country. Let us help you navigate buying, selling, and everything in between. We would love to be your guide to Gold Country living. Contact us today to get started! 

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