Personal property is a class of property that can include any asset other than real estate. The distinguishing factor between personal property and real estate, or real property, is that it is movable. The property isn’t fixed permanently to one particular location. This real estate type is not taxed as the fixed property does.

One other thing that distinguishes is that it involves riskier collateral. If you owe a creditor and don’t pay, the creditor can seize your home to get the money owed to him. However, if the creditor tries to place a lien on your property, it’s easier for you to take the property with you or dispose of it before the owner can claim it for payment of the debt.

Let’s take a closer look.

DEEPER INSIGHT

Personal property is also known as movable property, movables, and chattels. Consequently, it is viewed as an asset, a lender considers it when someone asks for a mortgage or a loan.

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Let’s look at the types of items that are classified as personal property.

PERSONAL PROPERTY EXAMPLE

Everything you own, aside from real property, is considered personal property. This includes material goods . Such as your clothing, jewelry, household goods, and furnishings. In fact, anything else that is movable and not permanently attached to a fixed location such as your home.

Your bank accounts and any other financial assets such as investment accounts are few examples too. When you apply for a loan, you can list your property as assets which surely will increase your worth.For this reason, creditors often consider this when determining how likely a borrower will repay the debt.

Learn more about Real Property Laws and Types

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TYPES OF PERSONAL PROPERTY

There are three types: tangible, intangible, and listed.

Tangible property includes physical objects such as vehicles, furniture, and household goods. While intangible property includes things like stocks and bonds, as well as intellectual property such as patents and copyrights.

Listed property is mostly used for business or personal purposes. Such as a vehicle or computer that you use for work-related matters as well as personal matters.

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ENDNOTE

Classifying real or personal property is a worthwhile endeavor if you want to reduce your tax burden. Because there is a lack of distinction regarding fixtures, you must become knowledgeable about the local case laws and historical evaluation practices. You may also want to consult with a tax advisor or financial advisor for a professional evaluation of your property tax position.