Final answer:
The process by which a legal valuation is placed on taxable property is called property assessment or property appraisal, which is utilized by municipal governments to calculate property taxes based on the declared value of real estate.
Step-by-step explanation:
The process by which a legal valuation is placed on taxable property is known as property assessment or property appraisal. Municipal governments in the U.S. generally use property assessments to levy property taxes based on the value of real estate held by individuals or corporations.
An official, typically a local assessor, is responsible for determining the property's value, and then a tax rate proportional to that value is applied.
This system has roots in historical practices, such as those in medieval Catalan municipalities, where property registers known as llibres d'estimes were used to assess taxes. However, property owners' declaration of assets like houses, gardens, mills, fields, vineyards, etc., is essential for a fair and accurate assessment, which then becomes the basis for calculating the tax owed. Moreover, because property ownership is often concentrated among higher income groups, economists usually regard property taxes as progressive.