Investor's wiki

Promotion Valorem Tax

Ad Valorem Tax

What is a promotion valorem tax?

A promotion valorem tax is a form of taxation in light of the value of a transaction or a property, either real estate or personal property. It is generally calculated as a percentage of the value of the property, instead of on size, weight, or quantity. Ad valorem is Latin for "as indicated by value."

More profound definition

A promotion valorem tax is normally forced when property is purchased as value added tax or a sales tax. At times, it very well might be forced later on a set basis, for example, once per quarter or one time each year. Promotion valorem tax can likewise be forced on estates and imports, and in different conditions when property changes hands, like inheritance.
Promotion valorem taxes are calculated as a percentage of the assessed value of the property being taxed. The assessed value of the property normally means the annual determination of fair market value, or the price that a potential buyer would pay and a potential seller would acknowledge for a property.
Property taxes on real estate and land value taxes are forms of promotion valorem taxes. The owners of real estate or different properties pay this tax in light of the value of their properties. With land value taxes, likewise called site valuation taxes or a site-value rating, just the land is taxed and any structures or improvements on the land are excluded from the calculation of the tax.
A sales tax is type of promotion valorem tax on goods or administrations charged at the hour of purchase. Sales tax can be added to the price of goods (tax-comprehensive), or included at the point of sale (tax-selective). The economic burden of sales tax generally falls on the buyer, yet now and again may fall on the seller.
A value added tax (VAT) is forced on business profits and labor. VAT is viewed as an indirect tax on the grounds that the seller is responsible for paying the tax, however the buyer pays higher prices. VAT is not the same as sales tax in that VAT is demanded exclusively on the value added by the seller. The tax is forced on the value added to the thing at each stage of its production cycle and the price paid by the last consumer.

Promotion valorem tax model

In the event that the market value of a 2,000-square foot home is $100,000, the promotion valorem property tax depends entirely on the home's value, no matter what its relative physical size.


  • The most common promotion valorem taxes are property taxes collected on real estate.
  • Promotion valorem taxes are generally required on both real property (land, structures and different designs) and major personal property, like a vehicle or boat.
  • A promotion valorem tax is a tax in view of the assessed value of a thing, like real estate or personal property.
  • The Latin expression ad valorem means "as indicated by value." So all promotion valorem taxes depend on the assessed value of the thing being taxed.
  • Property promotion valorem taxes — for example property taxes — are typically exacted by nearby locales, for example, counties or school regions.