Tangible personal property taxes: What they are & why they matter

by Kristen Costa 08/03/2022

What is the difference between property tax and tangible personal property tax? While property taxes are commonly understood as payments on your home or land, tangible personal property is a less common term used in real estate. Referring to physical objects other than the literal land or building, personal tangible property is important in commercial and rental businesses. Here is the basic info to know about personal tangible property and associated taxes:

Tangible personal property examples

Some examples of business assets qualifying as tangible personal property include:

  • furniture
  • production machinery
  • computers
  • delivery vehicles

Individuals and households may have personal tangible property such as:

  • jewelry
  • collectibles
  • sports & hobby equipment

You can think of tangible personal property as anything of value with physical existence. Other assets, such as patents and copyrights, do not count as tangible personal property as they are not literally tangible.

How tangible personal property taxes work

Similar to regular property taxes, personal tangible property taxes are based on a percentage of either the asset's sale price or assessed value. Landlords and businesses have to report these assets on a tax return, as long as they are related to a business. Taxes are paid to the local government, and in some cases can qualify for tax deductions on federal income tax returns.

Understanding personal tangible property taxes is crucial if you're planning on investing in a commercial or rental property. Keep this basic info in mind when considering your next move in real estate investment.

About the Author
Author

Kristen Costa

I've been listing and selling in Wilmington and surrounding areas since 1987 and have been affiliated with Fudge Properties since 2007. I have a strong reputation for outstanding quality of both work and interpersonal relationships, knowing what needs to be done and how to elicit cooperation for getting it done. I'm also proficient and knowledgeable about the Mass Housing program guidelines, successfully completing numerous housing lotteries for first time home buyers, over 55 buyers and renters. Whether you're buying or selling, I can help you get the best deal. Just looking? That's OK. Use my website all you like, but you'll have to create a free account to unlock all the best search features. Once you sign up, you'll be able to save listings, save your search criteria, get automated email updates for new homes matching your saved search criteria, and more. Good luck on your house hunt! I hope to hear from you soon.