ad valorem

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Ad valorem translated directly from Latin, means "according to [the] value [of something].” In practical use, the term is used in taxation to designate taxes levied against property, real or personal, at a certain rate based upon the property's value. 

An ad valorem tax is levied according to the value of the property as determined by an assessment or appraisal. Assessment on a regular basis is a common characteristic of an ad valorem tax.

[Last updated in June of 2022 by the Wex Definitions Team]