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RE101 Real Estate Fundamentals CH#8 - Real Estate Taxes and Other Liens-Selected Problems Mr. Mahoney Taxes that are levied against real estate so that each taxpayer will share the cost of various government activities in proportion to the value of the property are known as ad valorem taxes (according to value). Therefore these taxes are based on the value of the property. How do we compute property taxes? Suppose, for example, that the assessed value of a particular property is 70% of the full market value, which is estimated at $50,000, and the official tax rate is $4 per $100 of assessment. The amount of the tax is computed as follows: Compute the assessed value: market value x assessment ratio $50,000 x .70= $35,000 Compute the tax: assessed value/100 x tax amount per $100 = property tax 35,000/100 x $4= $1,400 #1 A house has a market value of $80,000 and the tax ratio is 70%. What is the assessed value of the property? #2 If property is assessed at 40% of its fair market value (FMV), what would be the assessed value of a property that is worth $47,500? #3 If property is valued at $65,000 and assessed for 60% , what is the property tax if the rare is $5.30 per $100 of assessed value? #4 Property with a market value of $74,000 was assessed at 37% of value and taxed at the rate of $4.75 per $100 pf assessed value. What was the amount of the tax? #5 A house has a market value of $44,200. The assessment ratio is 50% of market value and the tax rate is $35 per $1000 of assessed value. What is the annual tax on the property? 1 The tax can also be expressed as so many mills on each dollar of assessed value. A mill is 1/10 of one penny. In decimal form, one mill is written as $ .001 1 mill = 1/10= .001 10 mills = 1penny= $ .01 100 mills = 10 cents= $ 10 For example, 54 mills ( in decimal form) is written as $.054 A property is assessed at $75,500 and the tax rate is 23 mills. The amount of the tax is: 23 mills= .023 $75,500 x .023 = $1,736.50 1. A property has a market value of $67,000. The assessment ration used is 82% of market value. The tax rate is $2.50 per $100 of assessed value. What are the annual taxes for this property? 2. A property is assessed at $55,600. What is the annual tax bill, with taxes assessed at 23 mills.? 3. How much annual tax will be paid on a parcel of real estate assessed at $182,500.00, using an equalization factor of 1.30 and a tax rate of $4.18 per $100 of assessed value? 4. What is the assessed value of a property with a market value of $4,860,300.00 using an equalization factor of 0.53? 5. Real estate taxes in the amount of $1,460.00 are due and payable on December 31. A late penalty of 0.75% per month or any part thereof is levied for taxes paid after the due date. What amount will be due if the taxes are paid on April 4 of the following year? 2 ****** 6. A house has a market value of $80,000. The assessment ratio is 70%. What is the assessed value? 7. If property is assessed at 40% of its market value, what would be the assessed value of a parcel worth $47,500? 8. If property is valued at $65,000 and assessed for 60% of its value, what is the tax if the rate is $5.30 per $100.00 of assessed value? 9. If the annual tax on a property comes to $1,467.00, what is the assessed value of that property, given a tax rate of $1.63 per $100.00 of assessed value and assuming that this property is assessed at 100% of its market value? 10. A house has a market value of $44,200.00. The assessment ratio is 50% of market value and the tax rate is $35 per $1,000.00 of assessed value. What is the annual tax on this property? 11. Complete the following: 1 mil. = 1/10 cent = $_______ 10 mills = 1 cent = $________ 100 mills = 10 cents = $ _______ 12. Write 54 mills in decimal form: $____________ 3 13. A property is assessed at $75,500.00. The tax rate is 23 mills. The amount of property tax is: $ _______________ 14. A property is assessed at $125,600.00. The tax rate is 48 mills. Compute the annual tax. 15. Taxes are based on an assessment ratio of 53% of market value. This year, the school system collects 33 mills per $1.00 of assessed value. Compute the annual tax for a property valued at $255,000.00. **** 16. If real estate is assessed at $82,500.00, to be adjusted by an equalization factor of 1.30 and the tax rate is $4.35 per $100.00 of assessed equalized value, how much tax will be paid? 17. Mr. & Mrs. Billings own a house that is valued at $45,000. The assessed value is 53% of market value and the equalization factor is 1.30. The tax rate is 53.5 mills. What will be the tax bill for one year? 18. A man buys a lot by paying the back taxes and the interest on the taxes for the past 4 years. The average yearly interest rate is 7% and the tax rate is $10.50 per $1,000 of the assessed value. What did he pay for the lot if the assessed value of the lot is $12,000? 19. Mr. and Mrs. Jourdan bought property ten years ago to use as a second home on their weekends. This second home is taxed on the basis of 60% of assessed value, at the rate of $2.50 per hundred. This has been the case for the last five years. Since they bought, however, their yearly taxes have increased by $450.00. How much has the property increase in value? 4 20. A 100 foot by 100 foot lot was assessed at $15.00 per front foot and the house was assessed at $3,200. What was the total yearly tax if the rate was $4.00 per $100? 21. A house valued at $20,000 is assessed at 7.6%. The taxes increased by 30% of the assessed value. What is the amount of the tax increase? 22. The market value of a certain property is $8,000. It is assessed at 65% of its market value. It is taxed at the rate of 58 mills on the assessed value. What are the taxes? 23. The assessed value of all property in the city of Blissville is $12,000,000. The city budget is $504,000. Your property is assessed at $35,000. What taxes will you pay? 24. A property has a market value of $67,000. The assessment ratio used is 82% of market value. The tax rate is $2.50 per $100 of assessed value. What are the annual taxes for this property? 25. A property is assessed at $55,600. What is the annual tax bill, with taxes assessed at 23 mills.? 26. How much annual tax will be paid on a parcel of real estate assessed at $182,500, using an equalization factor of 1.30 and a tax rate of $4.18 per $100 of assessed value? 5 27. What is the assessed value of a property with a market value of $4,860,300 using an equalization factor of .53? 28. Real estate taxes in the amount of $1,460 are due and payable on December 31. A late penalty of .75% per month or any part thereof is levied for taxes paid after the due date. What amount will be due if the taxes are paid on April4 of the following year? 29. A house has a market value of $80,000. The assessment ratio is 70%. What is the assessed value? 30. If property is assessed at 40% of its market value, what would be the assessed value of a parcel worth of $47,500? 31. If property is value at $65,000 and assessed for 60% of its value, what is the tax if the rate is $5.30 per $100 of assessed value? 32. If the annual tax on a property comes to $1,467, what is the assessed value of that property, given a tax rate of $1.63 per $100 of assessed value and assuming that this property is assessed at 100% of its market value? 33. A house has a market value of $44,200. The assessment ration is 50% of market value and the tax rate is $35 per $1,000 of assessed value. What is the annual tax on this property? 6 34. A specific parcel of real estate has a market value of $80,000 and is assessed for tax purposes at 35 percent of market value. The tax rate for the county in which the property is located is 30 mills. The tax bill will be: 35. What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250, with an equalization factor of 125 percent, when the tax rate is 25 mills? 36. In the city of Broadview, the total assessed value of all real estate is $24,000,000. The share of the city budget to be paid by ad valorem taxes is $600,000. Your property in that city is assessed at $40,000. A. What will be the tax rate, expressed in mills? _______________________ mills. B. What will be the annual taxes on your property? $____________________________. 37. If a property has a market value of $80,000 and is assessed at $33,600, what is the assessment ratio? ____________________________% 38. In the city of Eastville, the millage rate is 20 mills for the school budget, 10 mills for city services, and 5 mills for county services. If a property having a market value of $70,000 is assessed at a 50% ratio, what would be the annual taxes on the property? 7 39. A 100 foot by 100 foot lot was assessed at $15.00 per front foot and the house was assessed at $3,000. What was the total yearly tax if the rate was $4.00 per $100? 40. A house valued at $20,000 is assessed at 7.6%. The taxes increased by 30% of the assessed value. What is the amount of the tax increase? 41. The market value of a certain property is $8,000. It is assessed at 65% of its market value. It is taxed at the rate of 58 mills on the assessed value. What are the taxes? 42. The assessed value of all property in the city of Blissville is $12,000,000. The city budget is $504,000. Your property is assessed at $35,000. What taxes will you pay? 43. A lender requires that the monthly mortgage payment include one-twelfth of the annual taxes. Property value is $50,000. Tax ratio is 30%. School tax rate is 120 mills; county tax rate is 25 mills. What is the tax payment per month? RE101(11)0805-Selected Problems 8