Definition, Meaning & Synonyms

ad-valorem

adjective

/æd ˈvæl.ɔːr.ɛm/

Definition

A tax based on the assessed value of an item, such as property or goods.

Examples

The ad-valorem tax on real estate is based on the property’s assessed value.
Many countries impose ad-valorem tariffs on imported goods, calculated from the total value of the goods.
Ad-valorem duties can be more equitable, as they scale with the value of the property.

Meaning

Ad valorem is a Latin term meaning ‘according to value.’ It typically refers to a type of tax that is calculated as a percentage of the value of the item being taxed.