Virginia State Real Estate Exam Practice Question
The purchase price for a new home was $250,000. The buyer put down 20% and the balance was a mortgage for 80% of the purchase price. The appraised value at the time of closing was $263,000 and the assessed value was $266,000. What will the buyer pay for one year's property taxes if the tax rate is 2.5%?
Correct Answer: C
Rationale: To determine the property taxes, the assessed value of the home is used, which is $266,000. The tax rate is 2.5%, so the calculation for one year’s property taxes is:
\[
\text{Property Taxes} = \text{Assessed Value} \times \text{Tax Rate}
\]
\[
\text{Property Taxes} = 266,000 \times 0.025 = 6,650
\]
Option A ($6,250) incorrectly uses a lower assessed value or tax rate. Option B ($5,000) significantly underestimates the tax based on the assessed value. Option D ($6,580) miscalculates the tax, possibly due to rounding or incorrect figures. Thus, the accurate calculation confirms the correct amount is $6,650.
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