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ad valorem:

Latin term used to describe a method of assessing and taxing property based on value.

A Wikipedia article titled, property tax, separates special assessments from ad valorem taxation by pointing out that the latter relies upon the fair market value of the property being taxed for justification (source of quote). Fair market value is an operative phrase that impels the question: Is a burdensome form of taxation the result of establishing the worth of a property by relying on the adage, everything is for sale?

Typically, the taxing authorities in a market economy sanction consultants (real estate appraisers) to make regular appraisals of properties that owners have no desire to sell. Appraisals are based on so called comparables. There are, of course, speculative property purchases in the real estate business where fair market value appraisal is no doubt appropriate. The term, flipping real estate, applies to buyers who speculate on property.

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related: tax; property; commercial and industrial real estate; taxes and incentives

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Economic Development Services, Inc. / copyrights and all rights reserved / 07/01/2012