IAAO 101 2024 Exam Review with Correct Solutions

IAAO 101 2024 Exam Review with Correct Solutions Tax Rate (def.) - Answer -Percent of assessed value at which each property is taxed in a given district. Tax Rate (formula) - Answer -Tax revenue (amount) / Assessed value Property Tax (formula) - Answer -Subject assessed value / Tax rate Budget Revenue (formula) - Answer -Total budget - Other taxes Effective Tax Rate (def.) - Answer -Reflects the relationship between total property taxes on real property and the property's market value. Effective Tax Rate (formula) - Answer -Assessment ratio (level) X Tax rate Jurisdictions tax rate is derived by (formula) - Answer -Budget revenue (budget -other taxes) / Assessed value Assessment Ratio (def.) - Answer -Estimated fractional relationship between the assessed values and market values of a group of properties. Assessment Ratio (formula) - Answer -Assessed value / Market value Neighborhood Life Cycle - Answer -Growth, Stability, Decline & Revitalization Principle of Conformity - Answer -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 - Answer -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 - Answer -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 - Answer -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 - Answer -Value created by the expected future benefits from the property; related to the Principle of Change. Principle of Consistent Use - Answer -Property must be valued with a single use for the entire property; land cannot be valued with one use and improvements with another. Principle of Contribution - Answer -Value of component depends on its contribution to the whole; basis for adjustments in the sales comparison app