What does the term "property tax" refer to?

The term "property tax" refers to a tax assessed on real estate by local government entities. This tax is typically based on the value of the property and is a significant source of revenue for local governments, which use the funds to finance vital services such as education, public safety, infrastructure maintenance, and other community services.

Property taxes are generally calculated as a percentage of the assessed value of the property and are paid annually by owners. This tax system helps local governments maintain their budgets and ensure the provision of services that support the community infrastructure. Understanding this concept is crucial for anyone involved in real estate, as property taxes significantly impact ownership costs and can influence buyer decisions.