A homeowner in Sussex County, Delaware receives her annual property tax bill. She notices that the bill is based on an assessed value that seems much lower than what her neighbor recently sold a similar home for. Her licensee explains that in Delaware, property is assessed at a percentage of its market value, not at full market value. Which term best describes the ratio of assessed value to market value used by Delaware counties for property tax purposes?
Correct Answer
A) Assessment ratio
The assessment ratio is the percentage of a property's market value at which it is assessed for tax purposes. In Delaware, each of the three counties (New Castle, Kent, and Sussex) sets its own assessment ratio, which is why assessed values often appear lower than current market values. This ratio is a fundamental concept in Delaware property taxation and is directly relevant to understanding tax bills.
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Related Concepts
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
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.
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