New Jersey Real Estate License Exam Practice Question
Properties in an area are assessed at 50% of their value. The tax rate is $6 per $1000. What is the annual property tax on a house in this area if the house is valued at $72,000?
Correct Answer: B
Rationale: To determine the annual property tax, first assess the property's value at 50%. For a house valued at $72,000, the assessed value is $72,000 x 0.50 = $36,000. Next, calculate the tax based on the rate of $6 per $1,000. Divide the assessed value by 1,000: $36,000 / 1,000 = 36. Multiply this by the tax rate: 36 x $6 = $216. However, this is the tax amount, not the total. The total tax is $216 x 10 (since $6 is for $1,000) = $1,200.
Option A ($600) underestimates the tax by not applying the full assessed value. Option C ($2,160) miscalculates the tax rate applied to the assessed value. Option D ($4,320) incorrectly assumes a much higher tax rate or assessed value.
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