New Jersey Real Estate Practice Exam Practice Question
A house has a market value of $150,000. The assessed value is 50% of true cash value. What are the annual real estate taxes if the tax levy is 51½ mills?
Correct Answer: B
Rationale: To determine the annual real estate taxes, first calculate the assessed value, which is 50% of the market value of $150,000. This gives an assessed value of $75,000. Next, convert the tax levy from mills to a decimal by dividing by 1,000, resulting in 0.0515. The annual taxes are then calculated by multiplying the assessed value by the tax levy: $75,000 x 0.0515 = $3,862.50, which rounds to $3,844.
Option A ($1,538) is too low, as it does not consider the correct assessed value. Option C ($5,854) and Option D ($7,688) overestimate the taxes based on incorrect calculations of either assessed value or tax levy.
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