A county assessor in Arkansas appraises a residential property at a true market value of $250,000. Which of the following correctly states the assessed value of this property for property tax purposes?
Correct Answer
B) $50,000, because Arkansas assesses property at 20% of market value
Arkansas law (Ark. Code Ann. § 26-26-101 et seq.) mandates that real property be assessed at 20% of its true market value. $250,000 × 20% = $50,000. The millage rate is then applied to this $50,000 assessed value to determine the annual property tax.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
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.
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In Arkansas, real property is assessed for property tax purposes at what percentage of its true market value?
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A home in Pulaski County, Arkansas has a true market value of $180,000. The total millage rate for the property is 50 mills. What is the annual property tax owed on this property?