Tax Terms

A Taxing Issue...
Terms You Should Know

Provided by Jay Burnham, VP
Coldwell Banker Residential Brokerage

Are you an informed taxpayer? If you're not, avoid making a taxing mistake! Learn these property tax terms before it's too late.

Property tax

Property taxes are what most homeowners pay for the privilege of owning a piece of real estate, on average 1.5 percent of the current market value. These annual local assessments by county or local authorities help pay for public services and are calculated using a variety of different formulas.

Assessed value

The local tax assessor, who uses that value to calculate the amount of tax to be paid on the property, determines a house’s assessed value.

Conveyance tax

A conveyance tax is a tax levied by a state or local government on the transfer of real property. For example, many states charge a tax when a home-seller transfers title to the property to a buyer. Also called a transfer tax.

Tax deduction

A tax deduction is a tax break given by the government. Mortgage interest, loan points and property taxes are significant tax deductions for most homeowners.

Capital gains tax

The capital gains tax is the tax the federal government and some state governments levy on the profit from the sale of real estate and other capital assets, such as stocks and bonds.

Classified property tax

A classified property tax is a system, still used in several states, that allows one type of real property to be taxed at a different rate than other types of property. For example, the tax rate on residential property may be higher than the tax rate on property used for business purposes.

JAY BURNHAM, VP
Coldwell Banker Residential Brokerage
PREVIEWS International® Property Specialist
54 Dodge Street
Beverly, MA 01915
978.233.2828

Designations Earned: CRB, CRS, GRI, RECS, SRES