Kovats Real Estate School Practice Test 2025 - Free Real Estate Practice Questions and Study Guide

Property taxes are primarily levied on real estate by local governments and are based on the assessed value of the property. When a property is assessed, a value is determined, which reflects its market value, and property taxes are calculated as a percentage of this value. These taxes serve as a critical source of revenue for local governments and are used to fund essential services such as public schools, emergency services, infrastructure maintenance, and local government operations.

The importance of property taxes is reflected in their role in community funding. Unlike fees paid to real estate agents, monthly maintenance payments, or insurance costs, which are either transactional or ongoing costs related to ownership, property taxes are a mandatory charge imposed by local authorities determined by local laws and policies. Understanding property taxes is essential for property owners as they need to budget for these periodic costs and understand their implications on property ownership and investment.