Florida Real Estate Broker ExaminationReal Estate Finance and InvestmentEasy
A Florida investor is evaluating a potential rental property. They are concerned about the impact of property taxes on their net income. Which tax term represents the official valuation of a property for tax purposes by a government assessor?
- AMarket value
- BAssessed value
- CTaxable value
- DMillage rate
Show answer & explanationAnswer & explanation
Correct answer: B. Assessed value
Assessed value is the valuation placed on a property by a public tax assessor for purposes of taxation. This value is used to calculate the property tax owed.
Why the other options are wrong
- A. Market value is what a property would sell for on the open market, which may differ from assessed value.
- C. Taxable value is the assessed value minus any exemptions, not the initial official valuation.
- D. Millage rate is the tax rate applied to the assessed value, not the valuation itself.
Assessed Value
Assessed value is the dollar value assigned to a property by a public tax assessor for the purpose of levying property taxes.
- Determined by local government assessors.
- Used as the basis for calculating property taxes.
- May differ from market value.
Memory trick: The 'Assessor' gives the 'Assessed' value.