What is the difference between property tax and tangible personal property tax? While property taxes are commonly understood as payments on your home or land, tangible personal property is a less common term used in real estate. Referring to physical objects other than the literal land or building, personal tangible property is important in commercial and rental businesses. Here is the basic info to know about personal tangible property and associated taxes:
Some examples of business assets qualifying as tangible personal property include:
Individuals and households may have personal tangible property such as:
You can think of tangible personal property as anything of value with physical existence. Other assets, such as patents and copyrights, do not count as tangible personal property as they are not literally tangible.
Similar to regular property taxes, personal tangible property taxes are based on a percentage of either the asset's sale price or assessed value. Landlords and businesses have to report these assets on a tax return, as long as they are related to a business. Taxes are paid to the local government, and in some cases can qualify for tax deductions on federal income tax returns.
Understanding personal tangible property taxes is crucial if you're planning on investing in a commercial or rental property. Keep this basic info in mind when considering your next move in real estate investment.
Angela is a San Pedro and Palos Verdes native, and is very familiar with the benefits of living in this wonderful coastal area of Southern California. As a key member of the family real estate business, Henry Falkenstein & Associates, she is able to service clients in San Pedro, Palos Verdes and the South Bay areas with ease. Whether you're a "first time" home buyer, a home seller or seasoned investor, she will ensure that you have all the necessary data and resources to make completely informed decisions about your real estate transactions. Her job as your Realtor isn't complete until you are 100% satisfied with her service!