IAAO Course 101 Review Questions with Verified Answers

IAAO Course 101 Review Questions with Verified Answers Tax Rate (def.) Percent of assessed value at which each property is taxed in a given district. Tax Rate (formula) Tax revenue (amount) / Assessed value Property Tax (formula) Subject assessed value / Tax rate Budget Revenue (formula) Total budget - Other taxes Effective Tax Rate (def.) Reflects the relationship between total property taxes on real property and the property's market value. Effective Tax Rate (formula) Assessment ratio (level) X Tax rate Jurisdictions tax rate is derived by (formula) Budget revenue (budget -other taxes) / Assessed value Assessment Ratio (def.) Estimated fractional relationship between the assessed values and market values of a group of properties. Assessment Ratio (formula) Assessed value / Market value Neighborhood Life Cycle Growth, Stability, Decline & Revitalization Principle of Conformity Value of a property depends on its relationship to its surroundings; maximum market value is achieved when reasonable similarity among improvements in the neighborhood. Principle of Competition Created by the potential for profits; availability must be in harmony with demand; if one or the other is in excess prices will decrease or increase. Principle of Balance Applied to an individual property; maximum value is obtained when the four agents of production are balanced - land, labor, capital and management. Principle of Change Market value is never constant; estimate of market value is only valid as of a specific date & changes in the market will impact future value estimates. Principle of Anticipation Value created by the expected future benefits from the property; related to the Principle of Change. Principle of Consistent Use Property must b