LeoGlossary: Ad Valorem Tax

2 mo
LeoFinance
1 Min Read
115 words

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Ad valorem tax is the amount of municipal property tax that is assessed by a public tax assessor and subsequently owed by the property owner. Since property taxes are a major source of revenue for municipal governments, ad valorem taxes can play a big role in the muni market.

For example, falling property prices in a municipality might precipitate lower ad valorem taxes as nearby property values are assessed lower. As a result, the municipality may receive less property tax income and its muni bonds may be riskier to hold or lose some value.

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