A power company owns a high-voltage transmission line corridor in Jefferson County. The corridor has been appraised at a fair market value of $2,000,000. Under Alabama's classified ad valorem property tax system, which assessment ratio applies, and what is the resulting assessed value?
Correct Answer
D) 30% assessment ratio; assessed value of $600,000
Public utility property in Alabama is classified as Class I under the state's ad valorem tax classification system and is assessed at 30% of fair market value — the highest assessment ratio of any class. For this transmission corridor: $2,000,000 × 30% = $600,000 assessed value. Class I carries the highest burden because utilities are considered to have a greater ability to pay and benefit significantly from public infrastructure.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Valuation Question
Background Knowledge for Valuation
Real World Application in Valuation
Related Topics & Key Terms
Key Terms:
More Valuation Questions
Example of economic obsolescence in real estate?
Who typically hires the appraiser in a real estate transaction?
Which appraisal report type do California lenders commonly rely on for single-family residence financing?
Return of an investor’s investment is provided for through:
All of the following are one of the four important elements of value, except:
- → Under the replacement cost approach of appraisal, an appraiser is least interested in:
- → The appraisal process which allocates a percentage of a property’s total value to the land and a percentage to the improvements is known as:
- → Which Tennessee government body is primarily responsible for appraising real property for ad valorem tax purposes at the local level?
- → A property's value decreased because a noisy highway was built nearby. This is an example of:
- → Which of the following is the least important factor used to determine the market value of a property?
- → In Texas, a comparative market analysis (CMA) can be prepared by:
- → All of the following have a specific dollar value, except:
- → In which appraisal approach to value would the value for the land be calculated separately?
- → In Texas, functional obsolescence includes:
- → A capitalization rate of 8% on a property with $40,000 NOI indicates a value of:
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Financing
12% of exam
Previous Question
Robert and Linda are a married couple who own and occupy their home in Mobile as their primary residence. They have applied for the Alabama homestead exemption. Which of the following statements correctly describes the maximum homestead exemption available to them?
Next Question
Donna is a licensed Alabama real estate salesperson helping a buyer evaluate a property listed as agricultural land. The buyer asks Donna how Alabama's property tax system would classify this land and at what percentage of fair market value it would be assessed. Which answer should Donna give?