In Nevada, it's a percentage (approximately 0.5%, varying from city to city and with other conditions, like commercial usage) of its assessed value, which is 35% of taxable value. Taxable value is the market value of the bare land plus the replacement cost for all improvements on the land, less depreciation.

Ok, but if real estate prices half the city can just double the tax from 0.5% to 1%? Correct?

Yes, but every elected official will lose their job at that millage rate increase and you'll have riots.

Why? If the real estate prices half and the municipality doubles the tax rate, everyone pays the same amount of tax in dollars per year?

Because people don't enjoy paying taxes if they perceived they should go down.

The cost of running a city is largely independent of house prices, so if the real estate market crashes there is no getting around that municipalities need to increase tax rates to meet their cashflow needs. People may not like that they feel they are getting ripped off, but the existing infrastructure has relatively fixed ongoing costs to maintain.

Oh absolutely, but that ignores the political cost of doubling tax rates.

Better to not get into that mess to begin with. Strongtowns is a great resource for cities looking to be prudent financially.

> Property taxes are relatively independent from the absolute value of the property.

In most places they are not. What would even compel you to write something like this?

Property values are regularly re-assessed according to recent sales and a % of the property value is then levied as tax.

Ok, where does the percentage come from? It is an arbitrary number set by the municipality to collect enough money from the property owners. Basically, if the city needs $100 million/year to operate it is just going to tweak the tax rate to hit that income number.

For example, in Vancouver the residential tax rate is around 0.15% and homes average around $2 million. Where I live which is a few hundred kilometres away the residential tax rate is around 0.5% and homes average around $600k. If you do the math, for both places the average place has $3000/year in taxes due — which is totally independent of house costs.

What does make the difference is if your house is more expensive than the average house. If you have a $2million dollar house in the place with 0.5% tax rate you are paying $10000/year in taxes despite your counterpart in Vancouver with a $2million dollar house is paying $3000/year.

I get this can be different across the world, but that is generally how it works in Canada.

That's a different question that I'm glad you were able to answer for yourself.

I live in California where property tax is fixed at 1% due to Prop 13, so I don't really know how it works anywhere else.

Ok, I guess that is specific to California. Where I live it doesn’t work that way.