What type of tax is calculated based on the assessed value of real estate?

The appropriate choice is the type of tax that is specifically calculated based on the assessed value of real estate. This tax is commonly referred to as property tax. Property taxes are levied by local governments like counties or municipalities and are based on the estimated value of residential, commercial, and industrial properties. This means that the amount a property owner pays in taxes will depend on the assessed value of their property as determined by local tax assessors.

Ad valorem taxes, which translates to "according to value" in Latin, can encompass various types of taxes calculated based on the assessed value of property. Therefore, property tax is a specific example of an ad valorem tax related solely to real estate. In this context, while ad valorem taxes include property taxes, it is important to note that property tax is the most commonly referenced type of tax in this specific scenario related to real estate.

In contrast to income tax, which is assessed on an individual's or entity's earnings, or capital gains tax, which applies to the profit realized from the sale of an asset, property tax is distinctively focused on real estate. Thus, the clarity lies in recognizing that property tax is the primary concern when discussing taxes computed from the assessed values of real property.