A licensed Arkansas real estate agent is helping a buyer named Marcus compare two properties. Property A has a true market value of $300,000, and Property B has a true market value of $150,000. Marcus asks the agent how Arkansas determines the taxable value used to calculate property taxes. Which explanation is correct?
Correct Answer
A) Arkansas assesses property at 20% of market value, so Property A's taxable base is $60,000 and Property B's is $30,000.
Arkansas law (Ark. Code Ann. § 26-26-101 et seq.) requires that real property be assessed at 20% of its true market value. For Property A: $300,000 × 20% = $60,000. For Property B: $150,000 × 20% = $30,000. The millage rate is then applied to these assessed values to determine the annual tax bills.
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