# Property Tax

*Taxes — Finicade finance glossary*

Property tax is an annual levy on real estate, based on an assessed value and a local rate, and it's the main funding source for US schools and local services. It's a wealth tax on one illiquid asset, which is why it hits asset-rich, cash-poor retirees hardest and why exemptions and caps for them are near-universal. Assessments can be appealed, and a successful appeal compounds every year afterwards.

**Formula:** `Property tax = Assessed value × Local tax rate`

**Also known as:** council tax, real estate tax, millage rate

**Related terms:** [Real Estate](https://finicade.com/glossary/real-estate), [Itemized Deductions](https://finicade.com/glossary/itemized-deductions), [Assessed Value](https://finicade.com/glossary/assessed-value), [Cost of Living](https://finicade.com/glossary/cost-of-living), [Sales Tax](https://finicade.com/glossary/sales-tax)

Source: https://finicade.com/glossary/property-tax