Business, Legal & Accounting Glossary
All property other than land and buildings attached to land. Cars, bank accounts, wages, securities, a small business, furniture, insurance policies, jewellery, patents, pets and season baseball tickets are all examples of personal property. Personal property may also be called personal effects, movable property, goods and chattel, and personalty. Compare real estate.
Personal property is a type of property. In common law systems, personal property may also be called chattels or personalty. It is distinguished from real property, or real estate. In the civil law systems, personal property is often called movable property or movables – any property that can be moved from one location to another. This term is in distinction with immovable property or immovables, such as land and buildings.
Personal property may be classified in a variety of ways. Tangible personal property refers to any type of property that can generally be moved (i.e., it is not attached to real property or land), touched or felt. These generally include items such as furniture, clothing, jewellery, art, writings, or household goods. In some cases, there can be formal title documents that show the ownership and transfer rights of that property after a person’s death (for example, motor vehicles, boats, etc.) In many cases, however, tangible personal property will not be “titled” in an owner’s name and is presumed to be whatever property he or she was in possession of at the time of his or her death.
Intangible personal property or “intangibles” refers to personal property that cannot be actually “moved” touched or felt, but instead represents something of value such as negotiable instruments, securities, goods, and intangible assets including chose in action.
Accountants also distinguish personal property from real property because personal property can be depreciated faster than improvements (while land is not depreciable at all). It is an owner’s right to get tax benefits for chattel, and there are businesses that specialize in appraising personal property, or chattel.
The distinction between these types of property is significant for a variety of reasons. Usually, one’s rights on movables are more attenuated than one’s rights on immovables (or real property). The statutes of limitations or prescriptive periods are usually shorter when dealing with personal or movable property. Real property rights are usually enforceable for a much longer period of time and in most jurisdictions, real estate and immovables are registered in government-sanctioned land registers. In some jurisdictions, rights (such as a lien or other security interest) can be registered against personal or movable property.
In the common law, it is possible to place a mortgage upon real property. Such mortgage requires payment or the owner of the mortgage can seek foreclosure. Personal property can often be secured with similar kind of device, variously called a chattel mortgage, trust receipt, or security interest. In the United States, Article 9 of the Uniform Commercial Code governs the creation and enforcement of security interests in most (but not all) types of personal property.
There is no similar institution to the mortgage in the civil law, however, a hypothec is a device to secure real rights against property. These real rights follow the property along with the ownership. In the common law, a lien also remains on the property and it is not extinguished by the alienation of the property; liens may be real or equitable.
Many jurisdictions levy a personal property tax, an annual tax on the privilege of owning or possessing personal property within the boundaries of the jurisdiction. Automobile and boat registration fees are a subset of this tax. Most household goods are exempt as long as they are kept or used within the household; the tax usually becomes a problem when the taxing authority discovers that expensive personal property like art is being regularly stored outside of the household.
In political/economic theory, notably anarchism, communism and some socialist philosophies, the distinction between private and personal property is extremely important. They are separated by a blurry boundary, which items of property constitute which is open to debate.
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This glossary post was last updated: 1st May, 2020 | 1 Views.