Personal property
Encyclopedia
Personal property, roughly speaking, is private property
that is moveable, as opposed to real property
or real estate
. In the common law
systems personal property may also be called chattels or personalty. In the civil law
systems personal property is often called movable property or movables - any property that can be moved from one location to another. This term is in distinction with immovable property
(or immoveable property) or immovables (or immoveables), such as land and buildings. Movable property on land, that which was not automatically sold with the land, included for example larger livestock
(wildlife and smaller livestock like chickens, by contrast, was often sold as part of the land). In fact the word cattle is the Old Norman
variant of Old French
chatel (derived from Latin capitalis, “of the head”), which was once synonymous with general movable personal property.
Intangible personal property or "intangibles" refers to personal property that cannot actually be moved, touched or felt, but instead represents something of value such as negotiable instrument
s, securities
, service (economics), and intangible assets including chose in action
.
Accountants also distinguish personal property from real property because personal property can be depreciated faster than improvements (while land is not depreciable at all). It is an owner's right to get tax benefits for chattel, and there are businesses that specialize in appraising personal property, or chattel.
The distinction between these types of property is significant for a variety of reasons. Usually one's rights on movables are more attenuated than one's rights on immovables (or real property). The statutes of limitations
or prescriptive periods are usually shorter when dealing with personal or movable property. Real property rights are usually enforceable for a much longer period of time and in most jurisdictions real estate and immovables are registered in government-sanctioned land registers. In some jurisdictions, rights (such as a lien
or other security interest) can be registered against personal or movable property.
In the common law it is possible to place a mortgage upon real property. Such mortgage requires payment or the owner of the mortgage can seek foreclosure
. Personal property can often be secured with similar kind of device, variously called a chattel mortgage
, trust receipt, or security interest
. In the United States, Article 9 of the Uniform Commercial Code
governs the creation and enforcement of security interests in most (but not all) types of personal property.
There is no similar institution to the mortgage in the civil law, however a hypothec
is a device to secure real rights against property. These real rights follow the property along with the ownership. In the common law a lien also remains on the property and it is not extinguished by alienation of the property; liens may be real or equitable.
Many jurisdictions levy a personal property tax
, an annual tax on the privilege of owning or possessing personal property within the boundaries of the jurisdiction. Automobile and boat registration fees are a subset of this tax. Most household goods are exempt as long as they are kept or used within the household; the tax usually becomes a problem when the taxing authority discovers that expensive personal property like art is being regularly stored outside of the household.
The distinction between tangible and intangible personal property is also significant in some of the jurisdictions which impose sales taxes. In Canada, for example, provincial and federal sales taxes were imposed primarily on sales of tangible personal property whereas sales of intangibles tended to be exempt. The move to value added taxes, under which almost all transactions are taxable, has diminished the significance of the distinction.
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
that is moveable, as opposed to real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
or real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
. In the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
systems personal property may also be called chattels or personalty. In the civil law
Civil law (legal system)
Civil law is a legal system inspired by Roman law and whose primary feature is that laws are codified into collections, as compared to common law systems that gives great precedential weight to common law on the principle that it is unfair to treat similar facts differently on different...
systems personal property is often called movable property or movables - any property that can be moved from one location to another. This term is in distinction with immovable property
Immovable property
Immovable property is an immovable object, an item of property that cannot be moved without destroying or altering it - property that is fixed to the Earth, such as land or a house. In the United States it is also commercially and legally known as real estate and in Britain as property...
(or immoveable property) or immovables (or immoveables), such as land and buildings. Movable property on land, that which was not automatically sold with the land, included for example larger livestock
Livestock
Livestock refers to one or more domesticated animals raised in an agricultural setting to produce commodities such as food, fiber and labor. The term "livestock" as used in this article does not include poultry or farmed fish; however the inclusion of these, especially poultry, within the meaning...
(wildlife and smaller livestock like chickens, by contrast, was often sold as part of the land). In fact the word cattle is the Old Norman
Norman language
Norman is a Romance language and one of the Oïl languages. Norman can be classified as one of the northern Oïl languages along with Picard and Walloon...
variant of Old French
Old French
Old French was the Romance dialect continuum spoken in territories that span roughly the northern half of modern France and parts of modern Belgium and Switzerland from the 9th century to the 14th century...
chatel (derived from Latin capitalis, “of the head”), which was once synonymous with general movable personal property.
Classifications
Personal property may be classified in a variety of ways. Tangible personal property refers to any type of property that can generally be moved (i.e., it is not attached to real property or land), touched or felt. These generally include items such as furniture, clothing, jewellery, art, writings, or household goods. In some cases, there can be formal title documents that show the ownership and transfer rights of that property after a person's death (for example, motor vehicles, boats, etc.) In many cases, however, tangible personal property will not be "titled" in an owner's name and is presumed to be whatever property he or she was in possession of at the time of his or her death.Intangible personal property or "intangibles" refers to personal property that cannot actually be moved, touched or felt, but instead represents something of value such as negotiable instrument
Negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. According to the Section 13 of the Negotiable Instruments Act, 1881 in India, a negotiable instrument means a promissory note, bill of exchange or cheque payable either...
s, securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
, service (economics), and intangible assets including chose in action
Chose (English law)
Chose , is a term used in common law tradition in different senses. Chose local is a thing annexed to a place, such as a mill. A chose transitory is something movable, that can be carried from place to place...
.
Accountants also distinguish personal property from real property because personal property can be depreciated faster than improvements (while land is not depreciable at all). It is an owner's right to get tax benefits for chattel, and there are businesses that specialize in appraising personal property, or chattel.
The distinction between these types of property is significant for a variety of reasons. Usually one's rights on movables are more attenuated than one's rights on immovables (or real property). The statutes of limitations
Statute of limitations
A statute of limitations is an enactment in a common law legal system that sets the maximum time after an event that legal proceedings based on that event may be initiated...
or prescriptive periods are usually shorter when dealing with personal or movable property. Real property rights are usually enforceable for a much longer period of time and in most jurisdictions real estate and immovables are registered in government-sanctioned land registers. In some jurisdictions, rights (such as a lien
Lien
In law, a lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation...
or other security interest) can be registered against personal or movable property.
In the common law it is possible to place a mortgage upon real property. Such mortgage requires payment or the owner of the mortgage can seek foreclosure
Foreclosure
Foreclosure is the legal process by which a mortgage lender , or other lien holder, obtains a termination of a mortgage borrower 's equitable right of redemption, either by court order or by operation of law...
. Personal property can often be secured with similar kind of device, variously called a chattel mortgage
Chattel mortgage
Chattel mortgage, sometimes abbreviated CM, is the legal term for a type of loan contract used in some states with legal systems derived from English law....
, trust receipt, or security interest
Security interest
A security interest is a property interest created by agreement or by operation of law over assets to secure the performance of an obligation, usually the payment of a debt. It gives the beneficiary of the security interest certain preferential rights in the disposition of secured assets...
. In the United States, Article 9 of the Uniform Commercial Code
Uniform Commercial Code
The Uniform Commercial Code , first published in 1952, is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.The goal of harmonizing state law is...
governs the creation and enforcement of security interests in most (but not all) types of personal property.
There is no similar institution to the mortgage in the civil law, however a hypothec
Hypothec
Hypothec is a mortgage in Roman and Scots law, in other words, a legal right over a debtor's property that however remains in the debtor's possession....
is a device to secure real rights against property. These real rights follow the property along with the ownership. In the common law a lien also remains on the property and it is not extinguished by alienation of the property; liens may be real or equitable.
Many jurisdictions levy a personal property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...
, an annual tax on the privilege of owning or possessing personal property within the boundaries of the jurisdiction. Automobile and boat registration fees are a subset of this tax. Most household goods are exempt as long as they are kept or used within the household; the tax usually becomes a problem when the taxing authority discovers that expensive personal property like art is being regularly stored outside of the household.
The distinction between tangible and intangible personal property is also significant in some of the jurisdictions which impose sales taxes. In Canada, for example, provincial and federal sales taxes were imposed primarily on sales of tangible personal property whereas sales of intangibles tended to be exempt. The move to value added taxes, under which almost all transactions are taxable, has diminished the significance of the distinction.
Personal versus private property
In political/economic theory, notably socialist (including anarcho-socialist) philosophies, the distinction between private and personal property is extremely important. Which items of property constitute which is open to debate.- Personal property is part of your person and includes property from which you have the right to exclude others (e.g., televisions, cars, clothes, etc.)
- Private propertyPrivate propertyPrivate property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
is a social relationSocial relationIn social science, a social relation or social interaction refers to a relationship between two , three or more individuals . Social relations, derived from individual agency, form the basis of the social structure. To this extent social relations are always the basic object of analysis for social...
ship, not a relationship between person and thing according to Marx (e.g., factories, mines, dams, infrastructure, etc.). In capitalismCapitalismCapitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...
, feudalism, and slavery there is no distinction between personal and private property.
- To many socialists, the term private propertyPrivate propertyPrivate property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...
refers to capital or the means of production, while personal property refers to consumer and non-capital goods and services.