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Example 1

Beth’s parents own a home worth $200,000. The assessed value of the home according to the County Assessor is $125,000. While Beth’s parents could sell the home for $200,000, they only have to pay property taxes on $125,000. The annual property tax rate in Beth’s county is 1.2%. Use this information to answer the questions below.

Solutions

  • What percent of the market value is the assessed value of the home?
  • x = % Equation: Assessed Value = x% (market Value) 125,000 = x (200,000) 125,000 ÷ 200,000 = x (200,000) ÷ 200,000 divide both sides by 200,000
  • .625 = x Change the decimal to a percent by multiplying by 100 62.5%
  • ANSWER: The assessed value is 62.5% of the market value.
  • What is the annual property tax on the home?
  • Equation: Property Tax = tax rate ( assessed value)
  • Tax rate = 1.2% = .012 (covert the % to a decimal for the equation)
  • Assessed Value = $125,000
  • Property Tax = .012 (125,000) Property Tax = $1,500
  • ANSWER: The annual Property Tax is $1,500
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Example 2

Christy has a house with a market value of $275,000 and an assessed value of $230,000. The annual property tax rate is $17 per $1,000 of assed value. Use this information to answer the questions below.

Solutions

  • a. What is the annual property tax on the home?
  • Equation: Property Tax = Assessed value ÷ 1,000 • tax rate per 1,000
  • = 230,000 ÷ 1,000 • 17 = $3,910
  • ANSWER: The annual Property Tax is $3,910
  • If she pays her property taxes monthly, how much does she pay per month? Round to the nearest cent.
  • Equation: Monthly Payment = Annual Property Tax ÷ 12
  • = $3,912 ÷ 12 = $326.00
  • ANSWER: The monthly payment is $326.00.
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Example 3

Mr. and Mrs. Morgan are considering purchasing a house with a market value of $250,000. The assessed value of the house is 58% of the market value and the property tax rate is 1.45% of the assed value. Use this information to answer the questions below

Solutions

  • What is the assessed value of the house?
    • EQUATION: Assessed value = % (Market Value) 58%= .58 Change the percent to a decimal by dividing by 100 to put it in the equation Assessed Value = .58 (250,000) Assessed Value = $145,000
  • ANSWER: The assessed value is $145,000
  • What is the annual property tax on the home?
  • Equation: Property Tax = tax rate ( assessed value)Tax rate = 1.45% = .0145 (covert the % to a decimal for the equation)
  • Property Tax = .0145 (145,000)Property Tax = $2,102.50
  • ANSWER: The Annual property tax is $2,102.50
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Example 4

Spencer’s owns a home with an assessed value of $110,000 and a market value of $190,000. The tax rate is 1.38% of the assessed value. His taxes are paid by his mortgage lender, so the property is included in his monthly mortgage payment. Use this information to answer the questions below.

Solutions

  • What is the annual property tax on the home?
  • Equation: Property Tax = tax rate ( assessed value)Tax rate = 1.38% = .0138 (covert the % to a decimal for the equation)
  • Property Tax = .0138 (110,000)Property Tax = $1.518ANSWER: The Annual property tax is $1,518.00
  • How much is he paying for his property tax per month?
  • Equation: Monthly Payment = Annual Property Tax ÷ 12
  • = $1,518 ÷ 12 = $126.50
  • ANSWER: The monthly payment is $126.50
  • c. What percent of his mortgage payment is his property tax if his mortgage payment is $1,050 per month?
  • Answer the question: $126.50 is what percent of $1,050? Let x = percent
  • Equation: 126.50 = x (1050)
  • 126.50 ÷ 1050 = 1050x ÷ 1050 divide both sides by 1050
  • 0.12047 = x Change it to a percent by multiplying by 10012 %
  • ANSWER: The Property tax is 12% of his monthly mortgage payment.
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