Define: Ad Valorem

“Ad valorem” is a Latin term used in taxation that means “according to value.” In legal contexts, it refers to a type of tax imposed on property or goods based on their assessed value. Ad valorem taxes are calculated as a percentage of the assessed value of the property or goods, with the tax rate typically set by the government or taxing authority. Common examples of ad valorem taxes include property taxes, which are based on the assessed value of real estate, and sales taxes, which are based on the purchase price of goods or services. Ad valorem taxes are often used by governments to generate revenue for public services and infrastructure based on the perceived value of the property or goods being taxed.

Ad valorem is a Latin term that means “according to value.” In the legal context, ad valorem refers to a tax or duty that is based on the value of the item being taxed. This type of tax is commonly used for property taxes, where the tax amount is calculated as a percentage of the property’s assessed value. Ad valorem taxes are also used for imports and exports, where the tax is based on the value of the goods being traded. This type of tax is often used to generate revenue for local governments and is subject to specific regulations and laws.

adj. Latin for “based on value,” which applies to property taxes based on a percentage of the county’s assessment of the property’s value. The assessed value is the standard basis for local real property taxes, although some places “caps” (maximums) on the percentage of the value (as under Proposition 13 in California) or “parcel taxes” which establish a flat rate per parcel.

According to value.

The term ad valorem is derived from the Latin ad valentiam, meaning “to the value.” It is commonly applied to a tax imposed on the value of property. Real property taxes that are imposed by the states, counties, and cities are the most common type of ad valorem taxes. ad valorem taxes can, however, be imposed upon personal property. For example, a motor vehicle tax may be imposed upon personal property such as an automobile.

An article of commerce may be subjected to an ad valorem tax in proportion to its value, which is determined by assessment or appraisal.

Duties, taxes on goods imported or brought into this country from a foreign country, are either ad valorem or specific. An ad valorem duty is one in the form of a percentage on the value of the property, unlike a specific duty that is a fixed sum imposed on each article of a class, such as all Swiss wristwatches, regardless of their individual values.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March, 2024.