New York Real Estate Salesperson ExaminationReal Estate CalculationsEasy
A property's assessed value is $250,000. The local tax rate is $18 per $1,000 of assessed value. What is the annual property tax bill?
- A$450
- B$45,000
- C$1,388.89
- D$4,500
Show answer & explanationAnswer & explanation
Correct answer: D. $4,500
To calculate the annual property tax, divide the assessed value by $1,000 and then multiply by the tax rate: ($250,000 / $1,000) * $18 = $250 * $18 = $4,500.
Why the other options are wrong
- A. This incorrectly divides the assessed value by $10,000 or multiplies by a rate per $10,000.
- B. This incorrectly multiplies the assessed value by the tax rate without dividing by $1,000.
- C. This incorrectly divides the tax rate by the assessed value.
Property Tax Calculation
The process of determining the annual tax amount due on a property based on its assessed value and the local tax rate.
- Assessed value is a percentage of market value.
- Tax rates can be expressed as mills, dollars per $100, or dollars per $1,000.
- Property taxes fund local government services.
Memory trick: Assessed value divided by a thousand, then times the rate, no floundering.