New Jersey Real Estate Practice Exam Free Practice Question
The purchase price for a new home was $400,000. 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 $415,000 and the assessed value was $417,000. What will the buyer pay for one year's property taxes if the tax rate is 3.5%?
Correct Answer: C
Rationale: To determine the property taxes, the assessed value of the home, which is $417,000, is used. The tax rate of 3.5% is applied to this value.
Calculating the property tax:
$417,000 × 0.035 = $14,595.
This confirms that option C is accurate.
Option A ($14,000) is incorrect as it underestimates the tax based on the assessed value.
Option B ($11,200) is also wrong, as it miscalculates the tax by applying a lower rate or value.
Option D ($14,530) is not correct either, as it inaccurately reflects the calculation, missing the exact assessed value application.
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