Chapter 13: Real Estate Taxes

Question 1

Ad Valorem

Answer 1

According to value; annual real estate taxes are ad valorem taxes

Question 2

Assessed Value

Answer 2

A property’s value for ad valorem tax purposes as established by the county property appraiser

Question 3

Debt Service

Answer 3

Annual mortgage payments, including principal and interest

Question 4

Exempt Property

Answer 4

Real property excused for payment of ad valorem taxes

Question 5

Immune Property

Answer 5

Real property that is never assessed or required to pay ad valorem taxes, such as government buildings

Question 6

Installment Sale

Answer 6

When the buyer pays the purchase price over time in separate installment payments

Question 7

Just Value

Answer 7

A fair and reasonable value; the property appraiser is required to assess properties at their Just Value

Question 8

Like Kind Exchange

Answer 8

An exchange of one property for another with a deferral of tax consequences; also known as a “1031 exchange”

Question 9

Mill

Answer 9

One one-thousandth (.001)

Question 10

Special Assessment

Answer 10

A one-time tax assessed against a property that will directly benefit from some public improvement

Question 11

Tax Rate

Answer 11

The millage rate; the tax rate is multiplied by the taxable value of a property to determine the levy

Question 12

Taxable Income

Answer 12

Income that is subject to taxation

Question 13

Taxable Value

Answer 13

Value of property for tax purposes determined by subtracting all exemptions from the assessed value

Question 14

Time is of the Essence

Answer 14

Contractual clause indicating that all time deadlines will be strictly enforced; Failure to timely perform will result in an automatic default of contract

Question 15

A one-time tax levied against properties that will directly benefit from a government expenditure or improvement is known as:

Answer 15

Special assessment

Question 16

Bob and Terri have lived in their principal residence for the last three years. When they sell the property, they realized an $80,000 gain. If they are in the 35% tax bracket, how much money will they owe in taxes as a result of the sale?

Answer 16

$0

Question 17

Which of the following is an example of an exempt property?

    A     Courthouse
B	Residential property
C	Church
D	Restaurant

Answer 17

C Church

Question 18

The county property appraiser assesses real property according to its fair and equitable value, known as the:

Answer 18

Just value

Question 19

Long term capital gains held for more than one year are taxed at what rate?

Answer 19

15%

Question 20

Real property taxes begin to accrue on January 1st of each year. When are they first due and payable?

Answer 20

November 1st

Question 21

Ed purchased a tax certificate in May. How many years must he wait before he may timely request a tax deed be issued?

Answer 21

Two years

Question 22

Which of the following is an “ad valorem tax”?

Answer 22

Real property tax

Question 23

If a property owner disagrees with assessed value determined by the county property appraiser, the first step for the property owner should be:

Answer 23

File a protest directly with the property appraiser’s office

Question 24

How much is the highest interest rate bid allowed on a tax certificate auction?

Answer 24

18%

Question 25

What type of laws are designed to provide farmers and agricultural property owners relief from high taxes by assessing their properties at a lower amount?

Answer 25

Greenbelt laws