Ad Valorem

Ad valorem is Latin for “according to value.” An ad valorem tax is a tax based on the assessed value of an item, most commonly real estate or personal property.

🏠 Common Examples

  • Property Tax: Local governments assess the value of real estate and apply a tax rate to determine the annual property tax bill. Only taxes based on the value of your property are deductible. Fees for services such as trash collection or HOA/maintenance are not deductible.
  • Vehicle Tax: Some states charge a tax based on the current market value of a car or truck.
  • Import Duties: Customs duties may be calculated as a percentage of the value of imported goods.

📊 How It Works

  • The taxing authority assesses the fair market value of the item.
  • A tax rate is applied to that value.
  • The result is the ad valorem tax owed.

Example:
A home is assessed at $250,000.
The local property tax rate is 1.2%.
Tax owed = $250,000 × 1.2% = $3,000

Looking for more tax information and tips? SHOW ME MORE
Was this article helpful?
0 out of 0 found this helpful
While TaxSlayer strives to make the information and links contained in our KB articles as timely and accurate as possible, we make no promise or guarantee about the timeliness, accuracy, or completeness of the contents on these pages. The information contained in the Knowledgebase (KB) is for general information only and is not intended to be tax, financial, or legal advice. The user is encouraged to review additional state and federal resources and publications as needed.

Switching to TaxSlayer is easy

Simply upload your return from whatever service you used last year
START FOR FREE

Related articles