What are property taxes?

Property taxes are charges levied by local governments against real estate properties to fund various public services, such as education, infrastructure, and emergency services. They are typically based on the assessed value of a property, which is determined by local assessing authorities. This value reflects factors such as the property's market value and its characteristics.

These taxes serve as a crucial source of revenue for municipalities, allowing them to maintain and improve community resources and services. Homeowners and property owners receive a property tax bill annually, which must be paid to avoid penalties or a potential tax lien against the property.

In this context, while federal income taxes and various fees are important aspects of financial obligations surrounding property, they do not represent the taxes specifically linked to property ownership. Therefore, the choice highlighting local governments’ authority to assess taxes on property ownership accurately defines property taxes.