Difference between Real Estate Taxes and Property Taxes

Real estate and property taxes are both taxes paid for the ownership of land, however there are notable differences between them, which we are going to cover in this article.

What are Real Estate Taxes?

Real estate taxes are the taxes paid to anything attached to the land and are essentially the same as property taxes. The state and other local governments levy them to generate revenue.

These taxes are often calculated based on property value, with high-value properties often paying more in real estate taxes.

What are Property Taxes?

Property taxes are the taxes that are levied on both real and personal.

Property and these taxes are not universal across the state. They are measured and assessed by local and municipal governments, which cause variation by region. Property taxes are compulsory, which means they are required by law.

Property owners are required to pay taxes each year. However, the rate at which they have to pay depends on how their local government appraises the value of their assets.

Difference between Real Estate Taxes and Property Taxes

The following table highlights the major differences between Real Estate Taxes and Property Taxes −

CharacteristicsReal Estate TaxProperty Tax
Real estate taxes are taxes that are paid to anything that is attached to the land.
Property taxes are taxes on privately owned property that can be moved and are not attached to the land.
Payment period
Real estate taxes are paid every month; for example, in the case of a homeowner, the tax is directly paid to the local tax assessor or the monthly mortgage payment.
Property taxes are annual taxes that are imposed on movable assets.
Type of property involved
The real estate tax is the tax imposed on real property.
Property tax is the tax imposed on private property.
Method of calculation
Real estate tax calculations mainly rely on the property's value, the assessment rate, and the tax rate.
Property taxes are assessed differently among states and vary from municipality to municipality. How one city estimates its taxes may differ from that of another.


Although both real estate and property taxes sound similar, they refer to different types of taxes. For example, an owner of a mobile home does not own the land the house is on; the mobile home here is considered personal property. And if the mobile homeowner also owns the land, then the land is assessed for real estate tax.

Updated on: 13-Jul-2022


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