A residential property in the Matanuska-Susitna Borough has an assessor's market value of $480,000. The borough assesses property at 100% of market value. The local mill rate is 12.5 mills. The property owner qualifies for Alaska's senior citizen exemption under AS 29.45.030, which exempts the first $150,000 of assessed value. What is the owner's annual property tax bill?
Correct Answer
C) $4,125
Assessed value is $480,000 because the borough assesses at 100% of market value. Apply the $150,000 senior citizen exemption first: $480,000 - $150,000 = $330,000 taxable value. A 12.5 mill rate equals $12.50 per $1,000, so $330,000 / 1,000 x 12.5 = $4,125. The correct answer is option C.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
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Previous Question
Thomas owns a single-family home in Fairbanks. He is 67 years old, has lived in the home as his primary residence for the past 12 years, and meets the income eligibility requirements under state law. Under Alaska's senior citizen property tax exemption, what benefit is Thomas most likely entitled to receive on his primary residence?
Next Question
A licensee in Juneau is advising a client about Alaska's property tax system. The licensee correctly explains several features of how property taxation works in the state. Which of the following statements about Alaska's property tax system is NOT accurate?