What primary function does property taxes serve?

The primary function of property taxes is to fund local government operations. Property taxes provide a crucial source of revenue for municipalities, which rely on these funds to maintain essential services such as public education, law enforcement, infrastructure (like roads and public transport), sanitation, and other community services. This revenue is vital for the overall functioning and development of local governments, ensuring they can meet the needs of their residents.

The other options, while related to real estate and local government in various ways, do not represent the primary function of property taxes. Reducing property values, encouraging real estate investment, and promoting residential development are not direct objectives of property taxation. Instead, property taxes are a necessary mechanism used by local governments to sustain their operations and support community welfare.