Yes it is based on the value of the tapu, and that is totally hit and miss - irrespective of where you are from. It is a historical mess where the value is underquoted to avoid a large purchase tax bill. The next time the property changed hands that figure "with a bit added" was used as the accepted tapu value.
Now, tapu value minimums are set locally and you can't go below. The values are reviewed annually. As is normal, reviewed means increased. If you think it through to a natural conclusion, the days of undervaluing properties are over. The big problem on the horizon, you read it here first, is overvaluation of tapu values - as minimum value levels are increased each year, but property prices aren't increasing. Soon enough the tapu value of a genuine 100k value villa, that you bought at market value of 100k, could well be 120k - and you pay the tax not based on what it was actually worth but on the value dreamed up by the authorities...