This is an example of an ad valorem tax.
Ad valorem taxes are levies whose amount is determined by the transactional or property value. Most of the time, it is levied at the moment of a transaction, like a sales tax or value-added tax (VAT). Ad valorem taxes can also be levied annually, like real estate or personal property taxes, or in connection with other notable occasions. A stamp duty is a type of ad valorem tax that is implemented in various nations. According to the assessed value of the taxable item, all ad valorem taxes are collected. Public tax assessors frequently appraise real estate owned by property owners in order to determine its current worth when ad valorem taxes, or municipal property taxes, are applied, which make up the majority of taxation.
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