Property tax is the amount that is paid by the owner of any property to the relevant municipal body in the area, periodically. This tax is paid every year and it is charged on every tangible asset that the person owns. These taxes are based on the assessments made by local municipal bodies and they accordingly levy a proportionate tax on the property. The rate of property tax and manner of valuation differs from one municipal authority to the other. There are different ways in which property taxes are calculated. Take the Annual Rental Value System- it levies taxes on the property based on the gross annual rent it can incur if it is let out. On the capital value-based system, the property tax is estimated on the basis of the market value of the property. This system is used in Mumbai, where the property tax is a percentage of the market value of the property. Currently, this rate is 0.316-2% depending on property use.