Final answer:
Land for a subdivision is considered real estate and is subject to property taxes, which are calculated based on the land's assessed value by local government officials. Property tax rates and values can vary based on several factors, including local economic conditions and exemptions for certain types of property owners.
Step-by-step explanation:
In terms of tax, land for a subdivision is considered real estate or property. Such land is subject to property taxes, which are imposed based on the parcel's assessed value. Property taxes support local government services and infrastructure, including schools and emergency services. The assessed value is determined by a local government official, often an assessor, and a property tax rate is applied to this value. This tax is typically paid in one or two installments per year.
It's important to note that property values and therefore property taxes can vary greatly due to factors like the economic health of the area, the quality of local school districts, and the overall desirability of a location. Some parcels of land, particularly those owned by nonprofit organizations, universities, or churches, may be tax-exempt and do not contribute to property tax revenues.
Additionally, the valuation of property for tax purposes can be a contentious issue, leading to measures like California's Proposition 13, which limited the ability of local governments to reassess and raise property taxes. Because property taxes are progressive, they tend to be concentrated among higher income groups, who are more likely to own property.