What Is Property, Types of Propery and Taxes Involved

Anbarasan Appavu
The term "property" refers to anything over which a person or business has legal title, granting the owner certain enforceable rights. Examples of property, which may be tangible or intangible, include automobiles, industrial equipment, furniture, and real estate, the latter of which is commonly known as "real property."
Types of Propery

The majority of properties have current or potential monetary value, and are thus regarded as assets. In certain circumstances, however, property can also be a liability. Instance: if a customer is injured on a company's property, the business owner may be obligated to pay the injured party's medical expenses.

• Property is any item over which an individual or business holds legal title.

• Property can refer to both tangible and intangible items, such as stock and bond certificates.

• Intellectual property includes concepts such as trademarks and patents.

• Property owners may also have liabilities, as is the case when a business owner is responsible for a customer's medical expenses incurred on his company's property.

Real, private, government-owned, and personal property are the most common forms of property.

Understanding Property

The term "intangible property" refers to assets, such as stocks and bond certificates, that represent current or potential value but have no inherent value. Although these are merely pieces of paper, they may represent substantial sums of money. Other types of intangible property, such as the reputation of a brand, are more nebulous and cannot be represented on paper.

As intellectual property, intangible assets such as design concepts, song lyrics, books, and screenplays are categorized. Even though these are immaterial, they may be of considerable value. Examples of intellectual property include the Nike "swoosh" logo and Coca-chemical Cola's formula.

Individuals and businesses typically retain attorneys to protect their intangible assets from infringement in order to assert ownership.

Types of Property

In the broadest sense, property refers to anything that an individual, group, or entity owns. It includes real property, personal property, private property, government property, as well as other types of property.

Real Property

Real estate is one of the most well-known forms of property. It consists of land, buildings situated on the land, and the rights to use and enjoy the land. Real estate is concerned with transactions (such as buying, selling, renting, and managing) involving land and structures used for residential, commercial, and agricultural purposes.

There are as many different types of property as there are types of property interests. Real property interests include both freehold and non-freehold estates. Freehold estates are perpetual ownership interests that can be passed down through generations. Non-freehold estates, also known as leasehold estates, cannot be transferred and have expiration dates; these estates include leases and other rental agreements.

Personal Property

Personal property is equally well-known as real property, but it excludes land (e.g., land and buildings attached to the land). Personal property is property that is not permanently affixed to the land and can be physically transferred. It includes apparel, automobiles, furniture, and other items.

Intangible assets, including bank accounts, patents, and investments, are also considered personal property. Even if they cannot be physically transferred, rights remain the property of the person or entity listed as the legal owner.

Private Property

Private property is any property owned by a private individual or organization. It consists of personal, real, tangible, and intangible property, as well as intellectual property. Private property is frequently classified as either real or personal property, but not all real or personal property is private.

Private property is neither accessible to the public nor government-owned. In certain circumstances, such as eminent domain, governments can, however, assume ownership of private property.

Government-Owned Property

All government-owned property, including real estate, resources, and other tangible and intangible assets, is categorized as government-owned property. Unlike private property, the majority of government-owned property is public. For example, libraries, public schools, and city parks are publicly accessible government-owned properties.

However, not all government-owned property is accessible to the public, and some publicly accessible property is not always accessible. For instance, a city park may have a curfew after which it is inaccessible to the public. There may be no public access to government-owned property, such as a military research facility or laboratory.

Occasionally, private property can be escheated to a local government entity, making it either temporarily or permanently government property. In some instances, private property owners are forced to relinquish or sell their property rights to the government.

Evaluating Property Assets

When calculating the value of a business, auditors, appraisers, and analysts incorporate all of its underlying assets. A manufacturer of small machine parts, for instance, may generate only $80,000 in annual revenue. However, if it owns the factory in which it operates and that building is valued at $1 million, the overall value of the business would be significantly higher than profits alone would suggest.

Moreover, if the same company holds a patent for a component, it has the potential to generate substantial revenue by licensing the manufacturing rights to a larger company, rather than producing the component in-house. In this manner, licensing agreements can generate lucrative revenue streams that substantially increase a company's market value.

Establishing Net Worth Through Property

A person's net worth can be determined by calculating the total value of their assets, such as real estate, automobiles, jewellery, stocks, bonds, and retirement savings, and then deducting any liabilities or debts.

For instance, if a person's assets consist of a $120,000 home, a $8,000 car, and a $62,000 IRA, their total property is $190,000. In contrast, if the same person is saddled with a $30,000 student loan and a $4,000 credit card balance, his or her total liabilities amount to $34,000. Therefore, the total net worth is $156,000 ($190,000 minus $34,000).

In general, when calculating a person's net worth, less valuable items such as furniture and clothing are not included unless they are antiques or rare collectibles.

How Do You Determine the Owner of a Property?

The owner of a property can be identified through an online search on the website of the county assessor, a court clerk, a real estate broker or attorney, or a general online search.

What Are Property Taxes?

Property taxes, also referred to as ad valorem taxes, are tax assessments based on a property's market value.

How Can Property Taxes Be Calculated?

The property tax is computed by multiplying a tax rate determined by the local tax authority by the property's assessed value. If a property is worth $100,000 and the tax rate is 4%, then the property taxes are $4,000.

What is the role of a property appraiser?

A real estate appraiser is responsible for determining a property's market value for real estate transactions. In contrast, a property assessor determines the tax value of a property.

The Bottom Line

The tangible and intangible assets that a person or organization owns and has the right to use are considered property. There are numerous types of property, each with its own set of classification and usage rules. Some assets are frequently classified as more than one type of property. In some instances, a house is both real property and private property. A computer can be both privately and publicly owned. It is essential to comprehend the various types and the rights associated with each.

Post a Comment

Post a Comment (0)