Chapter 19 Real Estate Tax

Question 1

Tax District:

Answer 1

A local government entity authorized by state, county, or municipality to levy taxes for a particular purpose.

Question 2

Ad Valorem:

Answer 2

A real property’s annual tax levied by taxing entities according to the property’s assessed value.

Question 3

Tax Base:

Answer 3

The total of the assessed valuations of real properties within a taxing jurisdiction, less the total of exemptions.

Question 4

Assessed Value:

Answer 4

The value of a property as established by assessors for the purpose of ad valorem taxation.

Question 5

Homestead Exemption:

Answer 5

An exemption of a portion of the assessed value of a homeowner’s principal residence from ad valorem taxation.

Question 6

Tax Levy:

Answer 6

The county or district looks at its sources of revenue, such as sales taxes, business taxes, income taxes, state and federal grants, fees, and so forth. The part of the budgeted expenditures that cannot be funded from other income sources must come from real property taxes. This budgetary shortfall becomes the ad valorem tax levy. The tax levy is derived every year, since budget requirements and revenue tallies are performed on an annual cycle.

Question 7

Tax Rate (Millage Rate):

Answer 7

The ad valorem tax rate of a taxing district, derived by dividing revenues required from taxpayers by the district’s tax base. If the millage rate is 30, the tax rate is 3%, or $3.00 per $100 of assessed valuation (net of exemptions).

Question 8

Special Assessment:

Answer 8

A lien against property to secure a tax levy for a specific public improvement, such as a new road or sewer. Only properties benefitting from the improvement are taxed and liened.

Question 9

Tax Lien:

Answer 9

A tax lien is the government’s claim on a property that is generally placed when a taxpayer fails to pay taxes owed.

States may impose a tax lien against property for failure to pay any real property taxes which the state has levied or delegated to local taxing bodies.

The federal government can impose a tax lien against property for failure to pay any tax due the Internal Revenue Service.

Question 10

Tax Certificate:

Answer 10

An instrument that gives the holder the right to apply for a tax deed after paying taxes on a property and after a statutory period.

Question 11

Tax Deed:

Answer 11

A deed used to convey title to property sold in a tax foreclosure.

Question 12

Tax Sale:

Answer 12

A court-ordered sale of a property to satisfy unpaid real estate taxes.