New Jersey Real Estate Exam Practice Question
A tax assessor determined that a commercial building with a 3.6% mortgage has a market value of $400,000. If the assessed value is 60% of market value and the tax rate is 63 1/8 mills, what is the annual tax?
Correct Answer: C
Rationale: To find the annual tax, first calculate the assessed value of the property, which is 60% of the market value. For a market value of $400,000, the assessed value is $400,000 × 0.60 = $240,000. Next, convert the tax rate from mills to a decimal: 63 1/8 mills equals 0.063125. To find the annual tax, multiply the assessed value by the tax rate: $240,000 × 0.063125 = $15,150.00.
Options A, B, and D are incorrect as they do not align with the calculations based on the assessed value and tax rate, leading to values that do not accurately reflect the tax owed.
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