What is Property Tax?
Property tax is a type of local tax. It is an annual tax on real property such as the house, building, office etc. The tax is levied on the basis of market value of the land. Property tax is one on the oldest tax; it is levied throughout the world. Property tax is levied on every individual who owns a property or a land. The local property tax amount varies depending upon the size of the property; the use of the property i.e. whether property is being used for personal use or for commercial purposes. The tax on commercial property is greater than the tax on residential property. The reason is that commercial property is used to earn money by the owner while residential is utilized for personal use.
Advantages of Property Tax
Property tax is easy to administer and maintain. it is not only easy but also cheap to administer property tax. People who own property cannot avoid paying this tax. The success rate of collection of property tax is 95 percent. It is transparent; people understand the method of calculating property tax because most people are aware of the market value of their property. Most people can easily afford to pay property tax. It is designed properly and tax can be marginally progressive. It is very well suited as a source of locally generated revenue for local governments.
Hence, property tax is an important element of taxation. Most of the people payout properly rather than finding ways to avoid paying it.
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