1. Property Tax
Section 13.1

2. Vocab
Fair Market Value – the price at which property can reasonably be expected to be sold.
Assessed Value – found by multiplying fair market value by the assessment rate (% varies mostly by state)

3. A commercial building has a fair market value of $1,480,000
A commercial building has a fair market value of $1,480,000. If the assessment rate is 70%, find the assessed value.

4. Finding the tax rate 1. ID the amount of money needed
2. Find the fair market value of all real properties in the area
3. Find the total assessed value of all real properties in the area
Tax rate = total tax amount needed
total assessed value

5. A large community college district needs $22,350,000
A large community college district needs $22,350,000. The taxing authority has determined that the total assessed value of all the real estate in the district is $2.48 billion. Find the property tax rate.

6. Formula for property tax
Tax = Tax Rate x Assessed Value
Often, tax is described in “dollars per…”
Dollars per $100  divide by 100.
Dollars per $1000  divide by 1000.
Mills  Divide by 1000.

7. A home is assessed at $65,000. Find the property tax if the tax rate is (A) 3.4%, (B) $4.50 per $100, (C) $38.40 per $1000, and (D) 48.2 mills.

8. One county has a tax rate of $2
One county has a tax rate of $2.40 per $100, and a second county has a tax rate of $26.60 per $ A planned home will have an assessed value of $290,000.
(A) Find the county with the lower tax.
(B) Find the amount saved by building in the county with the lower tax.