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A property tax is a levy imposed on real estate, primarily land and buildings. In some countries, like the United States, it also applies to business equipment, inventories, and sometimes even personal property like automobiles and furniture. The tax is based on the gross value of the property, not the owner's net wealth or debts.12

Property taxes are a significant source of revenue for local governments, particularly in the United States. The administration of property taxes involves identifying, valuing, and collecting taxes on the property. Valuation methods include rental value, capital value, and fair market value.324

Tax rates for property are determined by dividing estimated expenditures by the assessed valuation of the property. However, nominal rates can be misleading due to below-market assessments. Property taxes can have economic effects, influencing investment decisions and potentially being passed on to consumers through higher prices. The incidence of the tax, meaning who ultimately pays it, can be complex and depend on various factors.56