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I want to explain to you how assessment and taxation work. Lets start off by creating a small town with only three houses. Each house is different and has a different value. The first house has a market value of $200,000. The second house has a value of $250,000. And the third house is valued at $350,000. The city supply services and the money to pay for these services is recovered through property taxation. Lets imagine that the town needs to collect $1,200 to pay for these services. To calculate the tax rate you divide the cost to provide services by the total assessed value of all the properties in the town. This establishes a tax rate. Now to calculate how much tax each home pays, we multiply the tax rate by the assessment. As you can see the first house would pay $300. The second home would pay $375 and the highest valued home would pay five hundred and twenty-five dollars. Lets summarize what weve covered so far. One: assessment places a market value on each property. Two: t