Ad valorem is a Latin term meaning "according to value." In tax language, ad valorem means a flexible value dependent on the specific asset. Ad valorem is just one of many important terms related to property taxes you should know. Here are a few more examples of important property tax terms:
Assessed value
Assessed value refers to the value of your property as determined by the tax assessment rate. The assessed value of your property is the final determination of how much you need to pay in property taxes. To find the assessed value, you multiply the local assessment rate by the fair market value.
Using the following formula, we can figure out the assessed value depending on market price and assessment rate:
Assessed Value = Market Value x (Assessment Rate / 100)
For example, if the market value is $150,000 and the assessment rate is 90%, the assessed value comes to $135,000.
Fair market value
Fair market value is determined by factors including the features and size of your home in addition to outside variables like the local market. The value of similar properties in your area can affect the fair market value, making it important in finding the best buying or selling price for a piece of property.
Millage rate
Millage rate is a specific kind of tax rate. It's based on the amount per $1,000 of property value. Multiple millage rates can go into determining property tax amounts, including different rates from different local agencies like school boards, counties and emergency service providers.
These are only a few of the most important property tax terms to know. With a better understanding of the terminology, you'll be better equipped to make the best real estate decisions.
About the Author
Leona "Kay" Lehmer
I have been in the real estate industry for over 25 years! I started working with some of the top builders in Tampa and then decided to pursue my general real estate license. I love working with people and helping them find the home of their dreams. The TampaBay Metro area(Tampa, St Petersburg, Clearwater...)is a great City and has grown unbelievably in the past 25+years. I have extensive knowledge that I can share for those coming to the Florida area or those who want to move up or downsize or have to leave our great state. I make it my goal to work for you to find the right home, whether it be upsizing or downsizing, I will find the best location for you! From the beaches to golf course to the city or country, I can find the perfect home for you! When you call my phone, you get ME! You are not handed off, if I don't know the answer to a question, I will find out and get back to you! I Work FOR YOU!!
