Tax Terminology

Ad Valorem Tax.  Ad Valorem means “according to value”. An ad valorem tax is a property tax based on the assessed value of the property, which may or may not be equivalent to its market value.

Appraised Value.  Also known as “market value”. This is the value before any exemptions or deferrals are applied. Appraised value is the most probable price the property would sell for in the open market between a willing seller and an able buyer.

Assessed Value.  The dollar value assigned to a property for measuring applicable taxes. Assessed value equals the appraisal or fair market value less any deferred or exempt value. Assessed value is divided by 100 then multiplied by the tax rate to calculate the amount of property tax due.

Fair Market Value.  The price that property would sell for in the open market between a willing seller and a financially-able buyer, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of the purposes for which the property may be used.

Improvements on Land. Projects or structures increasing the value of property. Examples include buildings or other structures, pools, outbuildings, etc.

Parcel.  A land unit of any size under one ownership. A parcel could be (but is not limited to) acreage or a subdivision lot.

Personal Property. Property that is not real property and can be moved. Examples include boats, motor homes, unregistered vehicles and mobile homes that are not permanently affixed to the land and where the owner of the mobile home is different from the owner of the land it sits on. Personal property is appraised on an annual basis.

Reappraisal.  The process of determining the value of real property for property tax purposes.

Real Property.  Land, structures and improvements on the land, including manufactured homes that meet the statutory definition of real property.

Tax District.  A district where a governmental unit has the authority to levy taxes.  This includes municipalities and fire districts.