Property Taxes

1. Property Taxes 6.3

2. Decimal Tax Rate • Terms to Know: • Property Tax • Assessed Value • Decimal Tax Rate • Decimal Tax Rate formula= Amount to be Raised by Property tax Total Assessed Value

3. Decimal Tax Rate (Example) Paynesville School District budgeted expenses of $6,000,000. Estimated income of $1,800,000. Total assessed value last year was $39,000,000. Find the tax rate needed to meet expenses, correct to five decimal places.

4. Decimal Tax Rate (Solution) Expenses – Estimated income = Property tax needed $6,000,000 - $1,800,000 = $4,200,000. Solve the Decimal Tax Rate formula… $4,200,000 / 39,000,000 = 0.107692 = 0.10769 (Tax rate)

5. Check for Understanding (Solution A) • What is the decimal tax rate (3 decimal places)? • Expenses – Estimated income = Property tax needed $6,750,000 - $650,000 = $6,100,000. • Solve the Decimal Tax Rate formula… $6,100,000 / 80,000,000 = 0.0762 = 0.076 (Tax rate)

6. Check for Understanding (Solution B) • What is the decimal tax rate (4 decimal places)? • Expenses – Estimated income = Property tax needed =$1,950,000. • Solve the Decimal Tax Rate formula… $1,950,000 / 48,200,000 = 0.04045 = 0.0405 (Tax rate)

7. Tax Rates per $100 of Assessed Value (Example) • Calculate the property tax due on Watson’s $60,000 property if his tax rate is $6.20 per $100. • Divide assessed value by 100 $60,000/100 = 600 (# of $100 units) • Tax rate x # of $100 units = property tax due $6.20 x 600 = $3,720

8. Tax Rates per $100 of Assessed Value (C) • Calculate the property tax due on $42,000 property if his tax rate is $3.736 per $100. • Divide assessed value by 100 $42,000/100 = 420 (# of $100 units) • Tax rate x # of $100 units = property tax due $3.736 x 420 = $1,569.12

9. Tax Rates per $100 of Assessed Value (D) • Calculate the property tax due on $120,000 property if his tax rate is $4.128 per $100. • Divide assessed value by 100 $120,000/100 = 1,200 (# of $100 units) • Tax rate x # of $100 units = property tax due $4.128 x 1,200 = $4,953.60

10. Tax Rates per $1,000 of Assessed Value (Example) • Calculate the property tax due on Watson’s $60,000 property if his tax rate is $62 per $1,000. • Divide assessed value by 1,000 $60,000/1,000 = 60 (# of $1,000 units) • Tax rate x # of $1,000 units = property tax due $62 x 60 = $3,720

11. Tax Rates per $1,000 of Assessed Value (E) • Calculate the property tax due on $67,500 property if his tax rate is $50.08 per $1,000. • Divide assessed value by 1,000 $67,500/1,000 = 67.5 (# of $1,000 units) • Tax rate x # of $1,000 units = property tax due $50.08 x 67.5 = $3,380.40

12. Tax Rates per $1,000 of Assessed Value (F) • Calculate the property tax due on $13,500 property if his tax rate is $25.83 per $1,000. • Divide assessed value by 1,000 $13,500/1,000 = 13.5 (# of $1,000 units) • Tax rate x # of $1,000 units = property tax due $25.83 x 13.5 = $348.71

13. Tax Rates in Mills or Cents per Dollar of Assessed Value (Example) • Calculate the property tax due on Watson’s $60,000 property if his tax rate is stated as 62 mills or 6.2 cents per $ of assessed value. • Mills / 1,000 = Mills rate in $ • 62/1,000 = $0.062 • Cents / 100 = Cents rate in $ • 6.2/100 = $0.062 • Property assessed amount x rate in $ = total tax amount • $60,000 x $0.062 = $3,720

14. Tax Rates in Mills or Cents per Dollar of Assessed Value (G) • Calculate the property tax due on $38,400 property if his tax rate is stated as 52 mills per $ of assessed value. • Mills / 1,000 = Mills rate in $ • 52/1,000 = $0.052 • Property assessed amount x rate in $ = total tax amount • $38,400 x $0.052 = $1,996.80

15. Tax Rates in Mills or Cents per Dollar of Assessed Value (H) • Calculate the property tax due on $32,100 property if his tax rate is stated as 3.8 cents per $ of assessed value. • Cents / 100 = Cents rate in $ • 3.8/100 = $0.038 • Property assessed amount x rate in $ = total tax amount • $32,100 x $0.038 = $1,219.80