law
taxation
Taxation is one of the four basic powers of government over private property, along with police power, eminent domain, and escheat. It allows government to levy taxes on real property to raise revenue for public services such as schools, roads, and police. Property taxes are usually ad valorem, meaning based on value, and unpaid real estate taxes become a lien that can lead to a tax sale of the property.
- Exam tip
- Remember the four government powers with "PETE": Police power, Eminent domain, Taxation, Escheat. Property tax liens typically take priority over other liens.
- Example
- A home assessed at $200,000 in a town with a 2% tax rate owes $4,000 a year; if unpaid, the town may eventually sell the property at a tax sale.
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Last verified: 2026-10-23