Are Real Estate Taxes the Same as Property Taxes?

When buying or owning a home, you're bound to come across the terms real estate taxes and property taxes. They’re often used interchangeably, but do they actually mean the same thing? For homeowners, especially first-timers, understanding these terms is essential—not just for budgeting, but also for filing taxes, working with your mortgage lender, and planning for the future.

Let’s clear up the confusion once and for all.

Real Estate Taxes vs. Property Taxes: What's the Difference?

Here’s the short answer: in most cases, real estate taxes are property taxes, but the term property taxes can be broader depending on the context.

Real estate taxes specifically refer to taxes assessed on real property—meaning land and anything permanently attached to it, like your home. These taxes are typically levied by local governments (cities, counties, townships, or school districts) and help fund services like public schools, police and fire departments, road maintenance, and libraries.

On the other hand, property taxes is a term that can encompass both real property and personal property. Personal property includes movable assets like vehicles, machinery, boats, or even business equipment—things that aren’t permanently affixed to the land.

So while every real estate tax is a property tax, not every property tax is a real estate tax.

How Real Estate Taxes Work

Once you buy a home, you’re required to pay annual real estate taxes. The amount you owe is calculated by multiplying your property’s assessed value by the local tax rate. For example, if your home is assessed at $300,000 and your local tax rate is 1.5%, you’ll owe $4,500 per year in real estate taxes.

These taxes are typically paid either:

• Directly to your municipality once or twice a year, or

• Through an escrow account managed by your mortgage lender, who collects a portion of the tax bill with your monthly mortgage payment and pays the taxes on your behalf.

Want to get an idea of how this works in your state? Check out this helpful breakdown of property taxes by state from NerdWallet.

What About Personal Property Taxes?

In many states, especially in the South and Midwest, residents may also pay personal property taxes on items like cars or trailers. These are separate from real estate taxes and are often assessed annually by the Department of Motor Vehicles or a similar agency.

Businesses are usually more affected by personal property taxes, especially if they own significant equipment or inventory. Homeowners, unless they own specific taxable items beyond vehicles, generally don’t need to worry much about this category.

Why the Confusion?

The terms get mixed up because real estate is a type of property, and "property taxes" is a general phrase that rolls off the tongue easily. You might hear your mortgage lender, tax preparer, or local government use the terms interchangeably—and most of the time, they’re referring to your home’s real estate taxes.

To further muddy the waters, some states and counties officially refer to real estate taxes as property taxes on their websites and forms. But the bottom line is: when you’re dealing with your home, real estate taxes and property taxes are the same thing in practice.

Are Real Estate Taxes Deductible?

Yes—if you itemize your deductions, you can deduct up to $10,000 ($5,000 if married filing separately) of state and local taxes, including real estate taxes, on your federal income tax return under the SALT deduction.

The IRS offers a detailed guide on this topic if you’d like to dive deeper: Publication 530: Tax Information for Homeowners.

Final Thoughts: What You Need to Know as a Homeowner

Whether you call them real estate taxes or property taxes, here’s what matters:

• You’re responsible for paying them annually.

• The amount is based on your home’s assessed value and your local tax rate.

• They fund vital community services.

• In most homeowner contexts, the terms are used interchangeably—and that’s okay.

At Forti Homes, we’re here to make sure you’re not just buying a house—you’re buying confidently. Whether you need help understanding your tax responsibilities, figuring out escrow, or planning ahead for closing costs, we’re in your corner every step of the way.

Have questions about taxes or anything else related to homeownership? Reach out to us today. We love helping clients feel prepared and empowered through every part of their journey.