Final answer:
Ad valorem real estate taxes are calculated as a percentage of the property's assessed value, not by square footage, purchase price, or a fixed municipal amount. Assessors determine property value and apply a proportional tax rate.
Step-by-step explanation:
The best answer to Mayor Rodney's question on how ad valorem real estate taxes are calculated for a particular property is B) They are calculated as a percentage of the property's assessed value. Municipal governments in the U.S. usually impose property taxes as a form of revenue based on the value of real estate. A government official, typically called an assessor, determines the property's value, and then a proportional tax rate is applied to that value. Property taxes can be subject to caps and limitations as exemplified by California's Proposition 13. Furthermore, property taxes can vary depending on the economic health of the area, the quality of local school districts, and desirability, causing disparities in tax obligations among similar properties.