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Real Estate & Property Taxes — What’s the Difference? – Yahoo Finance

designer491 / Getty Images/iStockphoto

designer491 / Getty Images/iStockphoto

Real estate taxes and property taxes can be a confusing concept to research on the broadest level. Many readers find articles that use both of the terms (property taxes and real estate taxes) interchangeably, inviting the question — are they the same thing?

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Essentially, yes. According to Quicken Loans, it’s really a matter of semantics and how the IRS and average Americans more commonly use the terms. Most homeowners use the term property tax, while the IRS uses the term real estate tax. But the meaning is the same: “Both of these terms refer to money paid to state or local governments because of levies on immovable land,” per Quicken.

However there is one caveat when it comes to “personal” property taxes, which is a whole other category. This usually refers to taxes levied on non-fixed property such as cars, personal planes and RVs.

Property Taxes and Real Estate Taxes

These are essentially interchangeable terms. Both include a tax waged on any “immovable” property you own, so any plot of land, residence or business. Property or real estate tax are relevant terms for both everyday homeowners of single family properties as well as those who own rental properties or commercial buildings.

These taxes are typically paid annually to either local county and/or state governments — though they are often broken up into twice-yearly or quarterly payments, depending on where you live, per Rocket Mortgage. Said taxes are also dependent on ongoing assessments regarding the value of your property, which may raise or lower the amount owed.

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Personal Property Taxes

This is where the distinction comes in. While property taxes and real estate taxes are the same, personal property taxes are a different category altogether. To reiterate, property taxes refer to money owed on “immovable” property like land and homes and personal property taxes refer to money owed on “movable property” such as cars, RVs, boats, motorcycles, etc.

The latter tax is usually collected as part of the vehicle registration fee when you renew a license every year.

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This article originally appeared on Real Estate & Property Taxes — What’s the Difference?



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