Here's why:

* NaOH dissolves in water to produce hydroxide ions (OH-): This is the defining characteristic of a base.

* H2O (water) is neutral: It is neither an acid nor a base.

* The reaction of NaOH with water increases the concentration of hydroxide ions in the solution: This makes the solution basic.

The reaction looks like this:

NaOH (s) + H2O (l) → Na+(aq) + OH-(aq)

Important Note: While the addition of NaOH to water makes the solution basic, it doesn't change the fundamental nature of water itself. Water is still neutral.