ad valorem tax

Definition

A property tax based on the assessed value of real estate, meaning the more your property is worth, the more you pay. Latin for 'according to value,' or as homeowners call it, 'penalty for improvement.'

Example Usage

After renovating their kitchen, they were dismayed to see their ad valorem tax increase by 22% following the reassessment.

Origin

Direct Latin phrase meaning 'according to value,' adopted into English property tax law from Roman legal traditions

Fun Fact

California's Proposition 13 (1978) capped ad valorem tax increases at 2% annually, leading to situations where longtime neighbors pay wildly different taxes on similar homes.

Source: Municipal property tax standards

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NGMI

Not Going to Make It...