Apportion refers to the allocation of property taxes paid by a company, such as a utility or railroad, within a state based on various factors like the value and location of the property.
Apportionment involves the division and allocation of expenses, property, or assets. It is commonly used in real estate transactions to prorate property expenses between buyers and sellers, distribute inherited properties, or allocate unit values for taxation purposes.
The assessment base, also known as the tax base when applied to property taxes, is the total value of the property within a jurisdiction that is subject to taxation. This term is crucial in understanding how municipalities calculate property taxes and fund essential services.
Unpaid property taxes that can lead to a lien on real estate and, if not paid, may result in the property being sold by the tax authority to satisfy the debt.
The base year in real estate is a starting point used to compare financial data, often related to property taxes or operating expenses, to calculate escalations or adjustments in subsequent years.
Carrying charges refer to the ongoing expenses necessary for holding a property, such as taxes, interest on loans, insurance, and maintenance costs. These charges are pertinent to both idle properties and properties under construction.
Equalization ensures that property taxes are assessed fairly across properties with similar market values, helping maintain tax consistency within a given area or class of properties.
An escrow account is a financial arrangement where a third party holds funds temporarily until they're needed for specific obligations, such as property taxes, homeowner's insurance, and mortgage insurance in real estate transactions.
Escrow analysis reviews and itemizes expenditures and contributions to an escrow account, primarily conducted at the end of a calendar year, to project the following year's required monthly payments.
An escrow payment is part of a borrower's monthly mortgage payment that is set aside in an account to cover property taxes and insurance when they become due.
The Financial Obligation Ratio (FOR) is a metric compiled and reported by the Federal Reserve Board that tracks the household financial burden for the United States. The ratio represents the percentage of disposable income used for debt payments, including property taxes, insurance premiums, lease payments, and mortgage and credit card debt payments.
A homestead exemption is a legal provision that helps reduce the amount of property taxes on domiciles owned by qualifying individuals. These exemptions can vary by jurisdiction and may provide additional benefits for certain groups such as seniors or disabled individuals.
An impound account, also known as an escrow account, is a type of savings account set up by a mortgage lender to pay property taxes and insurance premiums on behalf of the borrower.
Itemized deductions are specific expenses that can be deducted from taxable income to reduce the amount of federal income tax owed. They include costs such as mortgage interest, property taxes, and certain types of losses.
The millage rate is a tax rate applied to property, where each mill represents $1 of tax assessment per $1,000 of assessed property value.
Operating expenses in real estate refer to the costs incurred to operate and maintain a property. These include expenses like property taxes, utilities, hazard insurance, and maintenance, while excluding financing expenses and depreciation.
An owner occupant is a resident of a property who also owns the property. This term differentiates from absentee owners and rental tenants and has significant implications for real estate, including financing and tax benefits.
A Parcel Identification Number (PIN), also known as an Assessor Parcel Number (APN), is a unique numerical identifier assigned by local tax assessors to uniquely identify a parcel of real estate.
Prepayments in real estate refer to advance payments of expenses like insurance and taxes, which are often funneled into an escrow account.
Prorate refers to the process of dividing or distributing an amount proportionately between parties, commonly used in real estate for allocating property taxes, insurance, or other periodic charges between the seller and buyer.
Proration refers to the division of expenses or income proportionally based on the time used or the amount consumed between parties in a real estate transaction. This ensures fair allocation of costs such as property taxes, utilities, and homeowner association fees based on the agreed terms.
Tax abatement is a financial incentive offered by a government to reduce or eliminate property taxes on a property for a certain period. This encourages development and investment in specific areas or projects.
A tax consultant is a person or firm who, for a fee, assists individuals, businesses, and property owners in reducing their tax liabilities. They provide expert advice on tax legislation, planning strategies, and potential savings. Some states may require registration or licensing for tax consultants.
Tax Exemption is a full or partial retraction of property from the tax base, resulting in a lower AD VALOREM tax for the property owner.
Tax foreclosure is the process of enforcing a lien against property for nonpayment of delinquent property taxes. Taxing authorities hold a superior lien against all taxable property to enforce the payment of their taxes.
A tax map is a detailed and comprehensive document that shows the location, boundaries, dimensions, and various relevant information about parcels of land subject to property taxes. These maps are typically bound into books and maintained as public records at local tax offices.
A tax roll is the comprehensive list of real estate properties within a specific jurisdiction that are subject to property taxes. It includes details about the properties' assessed values, which are used to determine the property tax liabilities.
A tax sale is the sale of property after a period of nonpayment of taxes, where the purchaser receives a tax deed. The defaulting owner typically has a redemption period to reclaim the property by paying owed amounts.
A tax stop is a clause in a lease agreement that sets a limit on the amount of property taxes the lessor (landlord) is responsible for paying. Any property taxes exceeding this limit are paid by the lessee (tenant).
Taxable Value, also referred to as Assessed Value, is the dollar amount assigned to a property for the purposes of calculating property taxes. It's an estimation of a property's market value determined by the local tax assessor.
Amounts paid by a tenant to a landlord for the tenant’s share of expenses, typically encountered in net leases and leases with stop clauses. These payments help cover specific property-related costs such as common area maintenance, property taxes, and utility expenses.
A Triple-Net Lease (NNN) is a commercial real estate lease agreement where the tenant is responsible for covering property taxes, insurance, and maintenance costs, in addition to the rent.
A Triple-Net Lease (NNN) is a type of lease agreement where the tenant agrees to pay all the operating expenses of the property, including property taxes, insurance, and maintenance, in addition to the rent.
