What defines property taxes?

Property taxes are primarily defined as a tax that is levied on both real property (such as land and buildings) and personal property (which can include items such as vehicles, equipment, and other tangible assets). This definition captures the broad scope of property taxes and illustrates their basis as a critical revenue source for local governments.

Real property refers to land and anything permanently affixed to it, while personal property encompasses movable possessions. By taxing both categories, property taxes ensure that various forms of wealth are accounted for, thus distributing the tax burden across different asset types.

This definition differentiates property taxes from income taxes, which are based solely on personal income, and from commercial-specific taxes, which wouldn’t encompass residential properties. Furthermore, property taxes are not contingent upon whether or not a property has a mortgage; they are assessed based on the property's value regardless of financing arrangements. Therefore, the choice that correctly encapsulates the comprehensive nature of property taxes is the one stating that they are levied on both real and personal property.