Property tax is the annual amount paid by a land owner to the local government or the municipal corporation of his area. The property includes all tangible real estate property, his house, office building and the property he has rented to others.
In India, the municipal corporation of a particular area assesses and imposes the property tax annually or semi-annually. The tax amount is based on the area, construction, property size, building etc. so tax amount can differ within states or within municipal corporations too.
The collected amount is mainly used for public services like repairing roads, construction schools; buildings, sanitation. Central government properties and vacant properties are generally exempt.
Property tax includes taxes like lighting tax, water tax and drainage tax. Usually, vacant plots of land without an adjoining construction are not liable to be taxed.