What are ad valorem taxes based on?

Ad valorem taxes are based on the assessed value of a property. This means that the tax amount is calculated according to the estimated market value of the property, which can vary significantly depending on factors such as its size, improvements, and location. These taxes are typically levied by local governments to fund public services like education, emergency services, and infrastructure.

When property values increase, the amount of ad valorem tax owed also increases, making this tax method closely tied to how much a property is worth rather than its size, specific use, or geographic location alone. This is why the correct answer is based on property value, as it forms the core basis of how much tax property owners will pay.