What are ad valorem taxes primarily based on?

Ad valorem taxes are primarily based on the assessed value of property. This type of taxation is a method of levying taxes proportional to the value of an item or property being taxed. The assessed value is determined by a tax assessor, who evaluates the property's worth at a specific point in time, often considering factors such as comparable property sales, rental income, the cost to replace the property, and general market trends.

Using the assessed value ensures that taxes are applied fairly and consistently across similar properties and owners. Ad valorem taxes provide funding for essential local services such as education, public safety, infrastructure, and other community needs, which rely on accurate and equitable assessment practices. This approach contrasts with other methods of valuation, such as replacement costs or broker estimations, which do not necessarily reflect the taxable value of a property as determined by law.