Which tax is based on the assessed value of a property?

The tax that is based on the assessed value of a property is the Ad Valorem tax. This type of tax is commonly levied by local governments and is calculated as a percentage of the property’s assessed value, which is determined by property appraisers. The term "Ad Valorem" is Latin for "according to value," emphasizing that the tax magnitude correlates with the property's worth.

This method of taxation is prominent for funding essential services such as public education, infrastructure maintenance, and local policing. The property’s assessed value is typically re-evaluated periodically to reflect changes in the real estate market, ensuring that the tax rates are equitable and proportional to each property's current market value.

Utility tax, income tax, and sales tax do not relate directly to the assessed value of a property. Utility tax is based on consumption of utility services, income tax is related to a person's or entity's earnings, and sales tax is charged on the sale of goods and services. Each of these taxes operates on different principles and serves distinct purposes within the broader tax framework.