Ad Valorem is a Latin term meaning 'according to value.' It describes a tax whose amount is based on the value of a transaction or a property.
An ad valorem tax is a tax based on the assessed value of an item such as real estate or personal property. This term is commonly used in the contexts of property tax, real estate transactions, and import duties.
Real estate tax is a levy on property that the owner is required to pay. This tax is usually a major source of revenue for local governments and is often assessed as an ad valorem tax, based on the property's value.
