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RE Ch 7 Q&A
Real Estate Q&As for Chapter 7
|Who can levy taxes on real property to raise funds for providing local services?
|Counties, cities and municipalities, and townships assessing units and special assessment districts
|What is the purpose of taxation?
|To raise funds to pay for municipal services.
|What are property taxes based on?
|The assessed value of the property
|How is assed value determined?
|According to state law by county or township assessor or appraiser
|How often are ad valorem taxes paid?
|What is the role of the assessor in the taxing process?
|make the valuation and notify the owner of the assessed value
|How is tax base calculated?
|tax base = assessed values - exemptions
|What are the reasons for making the land the basis of taxation?
|The usual stability of land values makes land taxes predictable; The attachment of taxes to land makes enforcement reliable; Land is traditionally related to productivity and wealth; government takes its share.
|What is a taxing district?
|A taxing district is a governmentally-established entity, defined by a geographical boundary that has the authority to collect taxes for specific purposes.
|What are examples of a taxing district?
|school districts, library districts, and county bridge and highway departments
|How does a special tax district differ from a permanent tax district?
|special tax districts pay for the cost of a specific improvement in a specific area. Special tax districts cease once the cost of the specific project has been paid for, unlike permanent tax districts
|What appraisal methods do tax assessors use to determine the assessed value of a property?
|Assessors use any of the standard appraisal methods—sales comparison, cost, income—to assess properties, depending on the type of property.
|What are some circumstances that typically trigger a reassessment of a property?
|Improvements to the property in general. Specifically, basement finishing, garage additions, swimming pool construction.
|What is a "homestead exemption?"
|A portion of a property's value that is exempted from taxation because the property, or part of it, is owned and occupied as a family residence.
|Is a special assessment a voluntary tax lien or an involuntary tax lien?
|either, depending on whether the citizen has asked for the improvement (voluntary) or the taxing entity has initiated the assessment (involuntary).
|What protections might your state offer to a homeowner against the inadvertent loss of ownership for failure to pay property tax?
|Many states have grace or redemption period, a notification process, and equitable or statutory right of redemption.
|How often does the International Association of Assessing Officers (IAAO) guidelines state that assessors should conduct a physical review of properties?
|At least every 4 - 6 years, including an on-site verification of property characteristics
|What are the real property tax exemptions?
|the use to which the property is put; the owner's ability to pay taxes; the desire of the state and local governments to encourage certain economic or social activities