A taxable possessory interest is most commonly defined as the private beneficial use of publicly-owned property.
Taxable possessory interests are subject to taxation pursuant to article XIII, section 1 of the California Constitution, which provides that all property is taxable unless otherwise provided by the California Constitution or federal law. While publicly owned real property is generally exempt from taxation, under certain conditions, the private, beneficial right to the possession of publicly owned real property is subject to separate assessment as a taxable possessory interest.