What are "ad valorem taxes"?

Ad valorem taxes are taxes that are assessed based on the value of an item, property, or asset. When it comes to real estate, these taxes are levied based on the assessed value of the property, which is determined by the local government's appraisal process. This means that the amount of tax a property owner owes is directly tied to the value of their property, with higher-valued properties resulting in higher tax obligations.

This method of taxation is commonly used to fund local services and infrastructure, such as schools, roads, and public safety, making it a vital component of local government financing. The relation between property value and tax rates underscores the importance of accurate property assessments in ensuring equitable taxation across different properties within a given jurisdiction.