Module 15 Vocab

Question 1

when you divide the property tax amount by its market value (or multiply the mil rate by the assessment ratio)

Answer 1

effective tax rate

Note: the property’s market value or sale price is used rather than an assessed value (which is based on a ratio to market value)

Question 2

1) the relationship of the gross size of a building to its land area. 2)The relationship between the above-ground floor area of a building, as described by the zoning or building code, and the area of the plot on which it stands; in planning and zoning, often expressed as a decimal

Answer 2

Floor Area Ratio (FAR)

e.g., a ratio of 2.0 indicates that the permissible floor area of a building is twice the total land area.

FAR = Gross SF of all structures on site / Gross SF of the land site

Note: the reciprocal of land to building ratio

Question 3

The proportion of land area to gross building area;

one of the factors determining comparability of properties.

Answer 3

Land-to-Building Ratio
LTB = Gross SF of land / Gross SF building area

Note: the reciprocal of FAR
If the land area is 80,000 sq. ft., and the gross building area is 40,000 sq. ft., the land-to-building ratio is 2 to 1 (and the FAR in this example is 0.50).

Question 4

Property taxes are often expressed as a ____. A ____ is equal to one-thousandth of a dollar.

Answer 4

Mill Rate
1 mill = $1/ 1,000 = .001
(or in some municipalities it’s $1/$100)

Note: another way to express a mill is $1 of tax for every $1,000 of assessed value.

Ex: If the mill rate in the area is 25, and the assessed value is $125,000, then multiply the assessed value by the mill rate.
- $125,000 assessed value × 0.025 mill rate = $3,125 in taxes
OR
- $125,000/ $1,000 = $125 x 25 = $3,125

Question 5

A percentage of the loan amount that a lender charges a borrower for making a loan; may represent a payment for services rendered in issuing a loan or additional interest to the lender payable in advance; also called loan fee.

Answer 5

Points