Property tax

Property tax is a tax levied on land and buildings (real estate) and on personal property. In the U.S. it is typically the main source of revenue for local government. High property taxes have the effect of depressing property values and ironically lowering tax revenues. There are two effects of this tax since the tax is levied both on the land value and the building value. The effect of the tax on land has the effect of lowering land cost, since it discourages land speculation, thus benefiting buyers and thereby making housing more affordable. The effect of the tax on the buildings has the effect of increasing costs and discouraging construction and job creation.