Ad Valorem

Ad Valorem is the Latin word for "according to value."

An ad valorem tax (Latin for according to value) is a tax based on the value of real estate or personal property. It is more common than the opposite, a specific duty, or a tax based on the quantity of an item regardless of price.

An ad valorem tax is typically imposed at the time of a transaction (a sales tax or value-added tax (VAT)), but it may be imposed on an annual basis (real or personal property tax) or in connection with another significant event (inheritance tax, surrendering citizenship, or tariffs).

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