What is Real Property Tax

The real property tax is best described as:

  1. a regressive tax
  2. a use tax
  3. tax deferred
  4. an ad valorem tax.

The answer is D.

In California, property taxes are levied by cities and counties on an ad valorem basis, where ad valorem is a Latin phrase meaining “according to value”. Given that property taxes are ad valorem, owners of higher valued property pay more in taxes than owners of lower valued property.

But, since the passage of Proposition 13 in 1978, property taxes are based on date of acquisition of the property – and that date sets what’s called a ‘base value’ for property taxes.

This is not a pure ad-valorem system, but property taxes are still a percentage of the assessed base value.