Curious about: Is property tax based on purchase price or appraised value? The property tax is generally not calculated directly on the purchase price of a property but on a value determined by the local municipal authority, often referred to as the assessed or annual/ capital value. The municipal authorities calculate property tax based on the “assessed value” of the property derived from factors such as the built-up area, location, age of construction and use (residential or commercial).
Is Property Tax Based on Purchase Price or Assessed Value?
While the purchase price may informally reflect market value, property tax computation is guided by statutory valuation systems rather than the actual transaction amount.
Some civic bodies use the Capital Value System (CVS) wherein market/ready-reckoner (stamp duty) rates influence the valuation base, but even in CVS this is the assessed or “capital” value set periodically for taxation, not simply the price you paid.
Other municipalities follow the Unit Area Value (UAV) or Annual Rental Value (ARV) systems. Under UAV, each property is valued by multiplying a per-unit rate (per sq ft/metre) by area, adjusted for age, occupancy and use. Under ARV, a notional rental value is estimated and tax is applied on that base.
Thus, your property tax is computed by applying the prescribed tax rate (or factor) on this assessed base value, not directly on what you paid. Understanding this distinction is helpful if you feel your property’s assessed value is too high relative to its condition or use, you may seek a review with the local municipality.
Make Your Property Tax Payment Quickly & Earn Rewards Via NoBroker Now!
Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
Is Property Tax Based on Purchase Price or Appraised Value?
sia
27 Views
1
30 days
2025-11-11T08:23:51+00:00 2025-11-11T08:23:53+00:00Comment
Share