Business, Legal & Accounting Glossary
Property from point of view of tax law is classified into real property and personal property. Terms like real property and real estate are mostly used in common law. Civil law jurisdictions, however, refer to it as immovable property. Immovable property comprises land along with any permanently affixed structure to that land (like a building). Personal property is alternatively known as chattel or personalty. Personal property is further classified into tangible and intangible. Tangible property includes things like cars, animals and clothing. Intangible property, also called abstract property includes things like stocks and bonds ( financial instruments) and intellectual property (like trademarks, patents and copyrights).
Property tax laws differ from one nation to another. Applicable tax rates vary as per classification of a property. Houses, offices, motels, restaurants, shopping centres, and apartment buildings are all examples of real property. Personal property is mobile by nature. Cars, computers, boats, inventories, livestock, household goods all can be classified as personal property. Generally, property tax jurisdictions shy away from taxation of intangible property.
It includes things like trade secrets, copyrights, trademarks, trade names, and patents. Trade secrets are actually unpatented mass of information, which lies outside the public domain. In a manufacturing process material sources, franchise management protocols, marketing plans, results of R&D operations, best methods, test results, and databases all may be termed as trade secrets.
Trademark means service mark. It is basically any configuration (a word or symbol or a combination), which differentiates products of a company from its competitors. A Patent refers to some exclusive rights, which are granted by a country’s government to an inventor for a definite time period. Process of granting patents, patentee requirements, extent of exclusive rights all vary among nations depending upon their constitutional and legal framework. Copyrights are important issues for content providers like publishers of books, music movies, and computer software companies.
Property is any thing that is commonly recognized as being the possession of a thing or group. Important types of property include real property (land), personal property (physical possessions), and intellectual property (rights over artistic creations, inventions, etc.). Property can be tangible (objects such as cars, clothing, or a dead fox) or can be intangible (stocks, financial instruments, copyrights, trademarks). Some property can have aspects of both tangible and intangible property. For example, if you own a musical compact disk, you own the tangible part of the property (the disk, the case, the paper insert), but you do not own the intangible part of the property (the copyright in the performances, the artwork on the cover, etc.). Property is often divisible. An illustrative example is a piece of real estate. Assume you own a 10-acre parcel of land. Technically speaking, you begin by owning the parcel of land down to the center of the earth, and up to the sky. For centuries the common law doctrine was, Cujus est solum, ejus est usque ad coelum et ad inferos–meaning literally, “to whomever the soil belongs, he owns also to the sky and to the depths.” Not so anymore. In 1926 the US Congress passed the Air Commerce Act, which declared that the “navigable air space” of the U.S. was a public highway, open to all citizens. In a sense, the US took that property away from the people who owned the land below. Before that, an airline might have to seek your permission before flying overhead.
But your real property is divisible. Your may be required by law to grant easements or a right of way to adjoining neighbors so that they may pass across your land to have access to water or roads. If you are not so required, you may still sell to another a right of way while still retaining title to the land. You may grant to others rights to drill for oil or explore for minerals. You may grant to others the right to let their animals graze on your property, or to plant crops or remove timber. You may also sell or lease your land for particular limited purposes such as the erection of cellular phone towers, or the passage of electrical or utility lines. All these ancillary rights may already be appended to the property when you purchased it. In other words, a prior owner may have granted these rights to others, and when you purchased the property, you accepted the property subject to the rights of others.
You are also entitled to rent the property to another. When you rent your property, you are “selling” a piece of it. That piece is the right to possession of the land that is limited to a period of time. If we pursue the notion of property further into the abstract, the notion of property blurs into the notion of a right. For example, your neighbor has a right to draw water up from the earth or from a stream–but your neighbor cannot take so much water that you have none for your use. Your neighbors can not use their property in a manner which causes excessive waste or drainage to pass over your land. You also enjoy the right not to be free from nuisances such as noises, pollution, and odors. While these privileges appear like rights and less like property, bear in mind that these rights can be sold to a neighbor.
Some forms of property do not or can not have an owner. For example, creative works that were formerly subject to copyright protection may have exceeded the number of years for which copyright protection is available. Such works pass into the public domain, and are the property of no one. Examples of inventions whose patents have expired include the inventions of Thomas Edison. Examples of works whose copyrights have expired include the works of Mozart, and most of the works of Mark Twain, but not a work first published in 2001, A Murder, a Mystery, and a Marriage. Four shorts by the Three Stooges are in the public domain due to accidental failure to renew their copyrights in the 1960s. You are quite free to republish the original text of books that have passed into the public domain. The public domain may also include creative works whose authors have specifically disclaimed ownership rights.
Real property and personal property will nearly always have an owner, at least under our legal system, but there are exceptions. Some things that can not be owned include the following: other persons (outlawed in the US following the Civil War), seawater (but you can’t necessarily pollute it), parts of the seafloor (the UN Convention on the Law of the Sea contains restrictions), gasses in Earth’s atmosphere, some animals in the wild (though there may be restrictions on hunting or farming), celestial bodies and outer space, and land in Antarctica.
Property is defined as having rights to land.
More broadly construed, property can refer to anything tangible or intangible that could have an owner. Not all property is owned, but all owners have property.
Property rights — that is, legally defining the owners of property and defending their rights to their property — may be the most critical sine qua non of capitalism. Property rights are fairly standard in the developed world, and an important reason why the developed world has developed. On the other hand, much of the so-called developing world does not yet have clearly define and defend ownership of property.
As economist Hernando de Soto wrote in his book The Mystery of Capital, property rights enable owners to borrow against the value of their property. This creation of capital (financing) is what enables citizens to grow their economies. Without property rights, citizens are unable to establish the value of what they own, and borrow further against it to grow it. It is this dynamic, de Soto contends, that has largely kept the world divided between the haves and the have-nots.
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This glossary post was last updated: 29th November, 2021 | 5 Views.