Personal Property and Real Property

Property tax is a tax on property, and property can be of two broad types: personal property and real property. Governments levy taxes on personal and real property differently.

What is Personal Property?

A property is a valuable thing belonging to someone. There are several types of property, and several methods to classify these types. One such method divides the types into two categories: 

1. Personal property; and
2. Real property.

A personal property is a property that is not land, a building, or any other thing permanently attached to land. For example, a Suzuki Cultus belonging to Raheela Rao is her personal property.

What is a Real Property?

A real property or real estate is land, a building, or any other thing permanently attached to land. For example, the house of Moona Mighan is her real property.

Another name for real property is immovable property. In most civil law jurisdictions, real property is called immovable property and personal property is called movable property. It is common sense that anything permanently attached to land, and the land itself, are not movable – they are immovable properties. On the other hand, a car is a personal or movable property because it is not immovable.

Taxation of Personal and Real Property

Governments around the world levy taxes on personal and real properties differently due to their different natures. Real property, or real estate, usually continues to increase in value, but personal property normally decreases in value. The most common reason for this decrease in value is depreciation with use or the passage of time.

An example of a tax on personal property or movable property is Token Tax, and an example of a tax on real property is Property Tax.

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Property Tax in the USA