Daily Real Estate Exam Prep Question #100 - Property Tax

Daily Real Estate Exam Questions Here!!! Today our question has to do with property tax. Property Tax, Assessed Value, and Millage Rate typically come hand and hand and understanding each one is crucial to understanding all three. Property tax is one of the most common real estate math problems you’ll see on the real estate exam. Property tax is a real estate ad-valorem tax, which is paid by the owner of the property. All ad valorem taxes are based on the determined value of the item being taxed. In order to find a property tax rate, you must multiply the assessed value with the mill rate. The assessed value needs to be found before you can compute property tax. The assessed value is found by multiplying the assessment rate by the current market value. The mill rate or millage rate is the amount of tax payable per dollar of the assessed value of a property. The term “millage” is derived from a Latin word “millesimum,” meaning “thousandth,” with 1 mill being equal to 1/1,000th of a currency unit. As used in relation to property tax, 1 mill is equal to $1 in property tax. So in order to find property tax rate: you need assessed value and the mill rate. In order to find assessed value: you need the assessment rate and market value. Lastly, and luckily with mill rates in most real estate math problems, you will almost always be given the rate. If not, all you have to do is convert, which is as simple as multiplying by a decimal. #realestate #realestateexam #realestatelicense -=-=-=-=- Don’t forget to like and subscribe for more! Want to learn more about the smart way to get your real estate license and start a successful real estate career? Then make sure to visit the Real Estate License Wizard, getting started is easy. Just click the page below: https://realestatelicensewizard.com