What is property tax based on?

Property tax is based on the assessed value of owned property, which typically includes land and buildings. Local governments use this value to determine how much tax a property owner must pay. The assessment is usually conducted periodically and reflects the current market value of the property, taking into account various factors such as location, size, and property features. This system of taxation allows governments to fund public services such as education, infrastructure, and emergency services, thereby linking the property tax directly to the value that the property holds in the community.

Other options relate to different financial concepts. Purchases made by the property owner might influence sales tax obligations rather than property taxes. Income earned from investments pertains to income taxes, and monthly rental payments from tenants are typically associated with lease agreements, not directly with property taxes. The focus of property tax is solely on the value of the property itself.