Ad Valorem Tax
What is Ad Valorem Tax?
An ad valorem tax is a property tax levied based on the value of the property in question.
How does Ad Valorem Tax work?
Ad valorem (Latin for "according to the value") taxes are levied solely as a percentage of a property's market value without regard to quantity or intrinsic value. For instance, if the market value of a 2,000 square-foot home is $100,000, the ad valorem tax levied will be based solely on the home's $100,000 value, regardless of its relative physical size. Municipal property taxes are an example of an ad valorem tax.