Property tax is an annual tax levied on real estate based on the property's assessed value. It represents the largest source of revenue for Canadian municipalities, typically funding 40-60% of municipal budgets. Property taxes pay for local services including roads, police, fire protection, parks, libraries, and recreation. The tax is calculated by multiplying a property's assessed value by the combined municipal and education tax rates. Property taxes are generally considered stable and predictable revenue, though municipalities are often criticized for relying too heavily on this single source. Unlike income tax, property tax is owed regardless of the owner's ability to pay.