What are property taxes based on?

Property taxes are primarily based on the assessed value of the property, as determined by local tax authorities. This assessed value is an estimate, often calculated using various factors such as the size of the property, its location, condition, and comparable sales in the area. Local governments conduct regular assessments to ensure that property values reflect current market conditions, which then serve as the basis for calculating property taxes.

This method ensures a consistent and standardized approach to determining how much each property owner contributes to funding local services, such as schools, emergency services, and infrastructure. By basing taxes on assessed values rather than the total market value or recent sale prices, local authorities can maintain a stable revenue stream and avoid fluctuations caused by market volatility. Additionally, using assessed value rather than estimated rental value helps to focus on ownership and property use, which aligns more closely with the principles of property taxation.