Real Property Tax Computations

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 principle residence from ad valorem taxation

Question 6

Tax Levy

Answer 6

The county or district 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

Answer 7

The ad valorem tax rate of a taxing district, derived by dividing revenues required from taxpayers by district’s tax base. if the millage rate is 30, the tax rate is 3%, or $3 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 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 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 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 property to satisfy unpaid real estate taxes