Topic: Basic Information on Property Tax Calculation

Property Tax

Property is considered to be a source of income and hence, tax is levied on it. Under the Income Tax Act, real estates like building, flat, shop and such fall under the property tax. It is the local municipal authority that levies the tax in order to bear the cost of maintenance for basic civic services in the city. In India, the liability for paying tax is on the owner of the property which is very much unlike in other countries like UK where it is the liability of the occupier to pay the property tax.

Property tax falls on real estate structures, buildings and land attached to them. While the land devoid of any adjoined buildings does not fall under this category of tax. The following are the properties that can be taxed under this.

Real Estate Under the Tax
Self-occupied or residential flats
factory building
office building
godowns
shops
Calculate Property Tax
In case of let out properties, the annual value is equal to th following:
Municipal valuation
Rent received
Fair rent determined by the Income Tax department.

Deductions are given on the interest of the loans to build, buy and repair property. Also, 30% deductions are allowed on the net value for the maintenance and repair of property.

Property tax is only charged when the property is let out. For self-occupation, there is no property tax. In case of a property which is neither self occupied nor let out, property tax is again not levied. Tax would be calculated proportionately if the owner gives out the property on rent for few months.

Property tax, mileage tax is an ad valorem tax the owner pays for the value of the property being taxed. Counties, cities, towns, school districts and special districts each raise funds through property taxes. Multiply the taxable value of your property X the current tax rate for your property's tax class.

I read your post and I like it and I suggest you that first part is called the ad valorem portion and is computed by multiplying the property base tax assessment value by the ad valorem tax rate. Base tax assessment is the purchase price of the property. Under current California law, the base property tax assessment may increase each year a maximum of 2%.

In India property tax is always paid whether it is self occupied or not occupied at all. If it is rented out then you have to pay 3 months full rent as property tax in a year.

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