Property taxes are levied by local governments on real estate properties and are a major source of revenue. They are calculated based on the assessed value of the property and the local tax rate. The assessed value is determined by a tax assessor, taking into account factors like property size, location, and improvements. The tax rate, expressed as a percentage, is applied to the assessed value to determine the annual property tax amount. Example: If your property is assessed at $300,000 and the local tax rate is 1.5%, the annual property tax would be $4,500.