California is a dream destination. For people from all over the world, it epitomizes the American dream, beach life and sunbathing with a cocktail in hand. It is the home of Hollywood as well as Silicon Valley, a state where there is always and constantly something going on. For this reason, it is also a very popular place to buy real estate. Whether you want to live in California or invest your capital there, California is a pretty safe choice. But where to start? It’s important to get an understanding of who pays real estate taxes and how much. If you’re looking to invest in real estate, be sure to consider the additional taxes when buying a home.
What are property taxes?
Translated, property taxes are taxes on land or property.
Property taxes are ad valorem taxes that you pay for owning property, meaning they are based on a monetary value that is assessed to attribute to an item, land, property, etc. A real estate appraiser provides the basis for this calculation.
Real estate tax is often confused with land ownership tax. However, this is a mistake. Most of the property tax is levied on real estate because it is the largest asset most people own. But property tax can also be levied on airplanes, computers, furniture, etc. When buying a house, they must be paid up front and then collected from the seller. Property taxes are usually a rate multiplied by the assessed value of the property. This value is estimated by an appraiser and takes into account the location, age of the property, etc.
Different states and counties consider different items to be “property.” In California, it is important to distinguish between real property and personal property. Personal property is taxed differently than real property and may be exempt from taxation or have a different type of taxation.
Owning land is all subject to property taxation
Land ownership is often the first thought when thinking about property tax. Homes, land, or any improvements made on land that you own. The following things are considered real property
- Country
- Mines or quarries and all forests
- Improvements including buildings, fences, ornamental trees, etc.
Personal Property – What is considered property?
Personal property is different from principal property. By definition, personal property is all tangible or intangible property that is not real property (see above). Examples include tractors, boats, or even tools. However, not everything is taxable, such as personal property, household goods, etc. are tax exempt. California has property taxes on bonds, mortgages, stocks, etc.