Property Tax (redirected from Municipal Property Tax)

property tax

Levy imposed on real estate (land and buildings) and in some jurisdictions on personal property such as automobiles, jewelry, and furniture. Some countries also levy property taxes on farm equipment, business equipment, and inventories as well as intangibles such as stocks and bonds. Property taxes are usually levied by local or state governments rather than national governments, and they are a major source of tax revenue. Property taxes existed in the ancient world first as land taxes and later as taxes on farmhouses, livestock, and so on. The administration of a property tax involves identifying the property to be taxed, assessing its value, determining the appropriate tax rate, and collecting the requisite sum of money. Though sometimes burdensome to the poor, property taxes generally tend to redistribute the benefits of wealth from higher to lower income groups, since they often pay for schools and other services used by low-income groups. See also capital-gains tax; consumption tax; income tax; progressive tax; regressive tax.

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Property Tax 

a type of direct tax on personal and real property. The property tax has been known since ancient Greece and Rome, where it was collected by the state and designated exclusively for military expenditures. During the period of feudalism the property tax became more systematic, and the property of craftsmen, artisans, and peasants was taxed. Noblemen and clergy were not included in the tax-paying estate and were freed from payment of the tax. The establishment of more flexible forms of taxation and the growth and differentiation of the objects of taxation led to replacement of the general property tax by separate taxes on buildings, land, and other types of property. With the development of capitalism, income tax replaced the property tax.

Property tax has been preserved as an independent tax in the United States, Great Britain, Canada, the Federal Republic of Germany, and a number of other countries. It is levied on the value of buildings, land, equipment, commercial and industrial facilities, and the like. Natural and legal persons who own or lease property pay the property tax. With rare exceptions, property tax rates are proportional. Even where there is a progressive rate of taxation, it is extremely small, which is very advantageous to the propertied classes.

The property tax goes to local budgets. In the United States in the mid-1960’s the property tax supplied about 88 percent of tax receipts in local budgets; in Great Britain, about 25 percent. Large landowners pass on the main burden of the property tax to the working people by including a significant part of the property tax in rent. The interests of property owners are protected in every possible way. Thus, in Great Britain, there is no tax on residential buildings not rented out or on buildings of religious organizations. Industrial, commercial, and transportation enterprises are usually subject to a favorable tax.

There was no property tax in tsarist Russia. After the October Revolution of 1917, a property tax was levied from 1922 to 1924 as part of a combined income-property tax in order to reinforce state regulation of the incomes of various segments of the population and limit the incomes of private entrepreneurs.

V. V. KUROCHKIN