On what basis are property taxes assessed?

Property taxes are primarily assessed based on the value of the property. This means that local taxing authorities determine the taxation amount through an evaluation of the property's market value, which often takes into account various factors such as location, condition, property type, and current market trends. The assessment process typically includes appraisals to establish a fair market value, from which the tax amount is calculated.

The rationale for using property value as the basis for taxation is that it correlates with the owner's ability to contribute to public services funded by taxes. Higher-valued properties contribute more in taxes than lower-valued properties, which helps fund local schools, roads, and other community services.

While other options involve aspects related to property ownership or financial transactions, they do not serve as a foundation for tax assessments in the same way that property value does. For instance, capital gains on a property are relevant when the property is sold but do not influence the annual property tax assessment. Similarly, the amount paid for the property may not accurately reflect its current market value, and assessments are not determined by arbitrary reassessments without a valuation process. Thus, basing property taxes on assessed value ensures a consistent and equitable approach to taxation within a jurisdiction.