Ad valorem taxes are based on what?

• A. The owner's income
• B. The market value of the property
• C. The property location
• D. Age of property

Answer: (B)

Ad valorem taxes are based on value. “Ad valorem” means “according to value,” so the tax authority uses the property's value as the base to calculate the tax. In practice this is the market value (or an assessed value tied to market value), and the tax due comes from applying the local millage rate to that value. It’s not determined by the owner’s income, the property’s location, or the property’s age.