Unit 9 Flashcards
What are two reasons for making land the basis of taxation?
1) The usual stability of land values makes land taxes predictable.
2) The attachment of taxes to land makes enforcement reliable.
3) Land is traditionally related to productivity and wealth; government takes its share.
What is a taxing district? Give several examples.
A taxing district is a governmentally-established entity, defined by a geographical boundary, that has the authority to collect taxes for specific purposes. Examples are school districts, library districts, and county bridge and highway departments.
How does a special tax district differ from a permanent tax district?
A local government authority establishes a special tax district to pay for the cost of a specific improvement in a specific area. Special tax districts cease to exist once the costs of the specific project have been paid for, unlike permanent tax districts.
What appraisal methods do tax assessors use to determine the assessed value of a property?
Assessors use any of the standard appraisal methods—Sales Comparison, Cost, Income—to assess properties, depending on the type of property. Agricultural land valuation is based on land productivity. The assessor uses whatever approach provides the best estimate of market value, which may then be modified according to formulas to arrive at an assessed value.
What are some circumstances that typically trigger a reassessment of a property?
Improvements to the property in general. Specifically, basement finishing, garage additions, swimming pool construction.
What is a “homestead exemption?”
A portion of a property’s value that is exempted from taxation because the property, or part of it, is owned and occupied as a family residence.
The high school district in your town needs operating funds. How does it regularly obtain them?
The district determines how much of its budget must be paid for from property taxes. Tax officials calculate the tax base and a tax rate for the school district by dividing the tax base into the revenue required. This tax rate is applied to the taxable value of each property and billed to the homeowners at the proper time. The taxing agency (usually the county) collects the revenues and distributes the earmarked portion to the school district.
Is a special assessment a voluntary tax lien or an involuntary tax lien?
It can be either, depending on whether the citizen has asked for the improvement which is to be paid for by a special assessment (voluntary) or whether the taxing entity has initiated the assessment (involuntary).
What protections might your state offer to a homeowner against the inadvertent loss of ownership for failure to pay property tax?
Many states have grace or redemption period, a notification process, and equitable or statutory right of redemption.
There are no ____ on real property.
federal taxes
Property taxes are based on the _____ of the property
assessed value
_______ and _________ districts levy taxes on real property.
Assessing units ; special assessment
____ value is determined according to state law, usually by a county or township assessor or appraiser. Ad valorem taxes are paid annually.
Assessed
Level of assessment
the value may be adjusted by multiplying by a uniform percentage for the municipality.
Properties are _____for tax purposes on a regular schedule that is established by statute. Can be done “off schedule” when a property owner makes improvements to the property.
reassessed
An owner who is dissatisfied with the actions of the ____ or review board can take the protest to court.
appeals
Real property tax exemptions criteria:
The use to which the property is put.
The owner’s ability to pay taxes.
The desire of the state and local governments to encourage certain economic or social activities.
A property owner generally qualifies for a ______ if they are head of a family or resides on the property for a required length of time.
homestead exemption
The __________ includes commercial, industrial and utility properties and some vacant land.
non-homestead class
Other exemptions:
government-owned properties and properties owned by non-profit organizations.
Tax Base
The tax base of an area is the total of the appraised or assessed values of all real property within the area’s boundaries, excluding partially or totally exempt properties: tax base = assessed values – exemptions.
The tax rate
determines how much of a tax levy the tax base will receive.
The tax levy is derived every year, since _____requirements and revenue tallies are performed on an annual cycle.
budget
A mill is
one one-thousandth of a dollar ($.001).
Tax rate limitations
taxing bodies are forced to limit their budget requirements, unless there has been a sufficient increase in tax base to produce the required funds without raising the millage rate.
Each property owner’s tax bill is determined by multiplying the tax rate for each taxing district times the ______ of the property.
taxable value
Payment deadlines
are usually set by law and differ from region to region. Taxes are paid in arrears at the end of the tax period.
special assessment
is a tax levied against specific properties that will benefit from a public improvement.
tax lien
A tax lien is a lien against real property for the failure to pay property taxes. When title to a property is transferred, the tax lien should be paid first.
in rem proceeding
An in rem proceeding is one that is directed against a thing, rather than against a person.
The buyer of a_____ agrees to pay the taxes due.
tax certificate
After a period of time specified by law, the holder of the tax certificate on a property may then apply for a
tax deed.
A ____ is frequently some type of auction usually conducted by the sheriff. If the tax has not already been paid through the tax certificate process, the buyer of the property must pay the taxes due.
tax sale
During the _________, the defaulted taxpayer has the right to buy back the property and reclaim title.
redemption period
If the taxpayer can redeem the property by paying the delinquent taxes and any other charges before the tax sale occurs, this right is known as an _________
equitable right of redemption.
If the taxpayer redeems the property after the tax sale, this right is known as a _________
statutory right of redemption.
The purpose of a homestead tax exemption is
to offer some amount of tax relief on an owner’s principal residence.
Assessors are usually not allowed to do “spot” reassessments of individual parcels unless
a material change in the property has been reported.
What are ad valorem taxes based on?
The assessed value of property
What is the role of local tax districts?
To collect property taxes.
Certain classes of property owner and types of property are exempted or immune from real property taxation in many areas. The protected categories usually include
properties owned by a government agency.
The buyer of a tax certificate
agrees to pay the taxes due on a property in return for the right to apply for a deed.
What option is available to a homeowner who receives a tax bill that they feel is too high?
File a complaint with the local board of assessment review.
A homeowner’s property tax bill is derived by
multiplying each district’s tax rate by the assessed value of the owner’s property.
Which of the following can levy real estate property taxes?
A tax district.
