Ad Valorem Legal Meaning and Definition

Here is a simplified definition of the legal term Ad Valorem.

Ad Valorem (adjective)

Originating from Latin, "Ad Valorem" translates to "according to the value." It is primarily used to describe a type of tax or duty that is calculated based on the value of a property, commodity, or a transaction, rather than being a fixed or predetermined amount. Key examples include property tax and duties on imported goods. The rate is often expressed as a percentage and is imposed at the time of a transaction or a significant event, such as inheritance.