Real Estate Chapter 4.9 Flashcards

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Questions and Answers

What does the buyer of a tax certificate agree to?

Agrees to pay the taxes due on a property in return for the right to apply for a deed.

In calculating the tax base of an area, what happens to exemptions?

The tax levy is added to the budget shortfall.

Exemptions are subtracted from assessed values. (correct)

Exemptions are added to assessed values.

The millage rate is multiplied by the tax levy.

What is the purpose of equalization in the assessment process?

Smooth out wide discrepancies of assessed values within the district. (correct)

Modify the tax rate from one neighborhood to the next.

Adjust millage rates within the district to ensure fairness.

Ensure that property owners have nearly equal tax bills.

Which of the following is a benefit to local taxing authorities of taxing property?

Property tax revenue is predictable. Signup and view all the answers

What is a unique characteristic of a special assessment tax?

It only applies to properties that will benefit from the public improvement. Signup and view all the answers

What is a tax levy?

The amount of money the municipality must raise through the property tax. Signup and view all the answers

What does a tax certificate entitle its holder to do?

Entitles its holder to apply for a tax deed after a certain period. Signup and view all the answers

What option is available to a homeowner who feels their tax bill is too high?

File a complaint with the local board of assessment review. Signup and view all the answers

What is the purpose of a homestead tax exemption?

To offer some amount of tax relief on an owner's principal residence. Signup and view all the answers

What are ad valorem taxes based on?

The assessed value of property. Signup and view all the answers

What is the right of a property owner to redeem their property after a tax sale called?

A statutory right of redemption. Signup and view all the answers

What creates a voluntary tax lien?

The affected property owners have requested the improvement. Signup and view all the answers

Who can levy real estate property taxes?

A tax district. Signup and view all the answers

What is the purpose of an equalization factor in ad valorem taxation?

It adjusts assessments in a locality to make them more consistent with an average level for the state or other higher-level jurisdiction. Signup and view all the answers

How is a homeowner's property tax bill derived?

Multiplying each district's tax rate by the assessed value of the owner's property. Signup and view all the answers

Where does a property owner file an assessment complaint?

With either the assessor or the board of assessment review. Signup and view all the answers

What is tax rate calculated based on?

The local tax requirements and the tax base. Signup and view all the answers

A tax rate of 4% might be expressed in any of the following ways EXCEPT:

4 mills Signup and view all the answers

Who has the burden of proof for an assessment change when a homeowner appeals an assessment?

The homeowner. Signup and view all the answers

Which classes of property are exempted or immune from real property taxation?

Properties owned by a government agency. Signup and view all the answers

Study Notes

Tax Certificate and Property Acquisition

A buyer of a tax certificate agrees to pay owed taxes to claim a deed on the property.
Tax certificates enable immediate legal title acquisition to foreclosed properties under certain conditions.

Tax Base Calculation

Tax base calculations involve subtracting exemptions from assessed values to determine the taxable amount.

Equalization Process in Tax Assessment

An equalization process is applied to smooth out discrepancies in assessed values, promoting fairness in taxation.

Benefits of Property Tax Revenue

Predictable property tax revenue is advantageous for local taxing authorities compared to other tax forms.

Special Assessment Tax Characteristics

Special assessments are unique as they apply only to properties that directly benefit from public improvements.

Definition of Tax Levy

A tax levy represents the total amount of money a municipality needs to raise through property taxation.

Tax Certificate Functions

Holding a tax certificate allows one to apply for a tax deed after a specified period.

Homeowner's Tax Bill Options

Homeowners who dispute their tax bills can file complaints with the local board of assessment review.

Homestead Tax Exemption Purpose

A homestead tax exemption provides tax relief for qualifying owners residing in their primary homes.

Ad Valorem Taxes

Ad valorem taxes are based on the assessed value of property, determining tax obligations.

Statutory Right of Redemption

Property owners possess a statutory right of redemption, allowing them to reclaim property after a tax sale.

Creation of a Voluntary Tax Lien

A special assessment creates a voluntary tax lien only if requested by affected property owners.

Authority to Levy Property Taxes

Property taxes can only be levied by a designated tax district, not by other entities like utility companies.

Purpose of Equalization Factor

An equalization factor adjusts assessments in a locality to align them with average levels for the state or higher jurisdictions.

Property Tax Calculation Method

A homeowner's tax bill is calculated by multiplying the tax rate of each district by the assessed property value.

Filing an Assessment Complaint

Property owners should file assessment complaints with either the assessor or the relevant board of assessment review.

Tax Rate Calculation

Tax rates are derived from local tax requirements and the tax base, rather than individual property assessments.

Expressions of Tax Rate

Various expressions of a 4% tax rate include $4 per $100 and $40 per $1,000, but not as 4 mills.

Burden of Proof in Assessment Changes

In appeals regarding assessment changes, homeowners bear the burden of proof to substantiate their claims.

Property Tax Exemptions

Classes of properties often exempt from real property taxation typically include those owned by government agencies.

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Description

Test your knowledge on national ownership and tax certificates with these informative flashcards. Understand important concepts such as legal title, property taxes, and the rights of tax certificate buyers. Perfect for real estate students and professionals looking to reinforce their understanding of the subject.