David owns a commercial office building in South Bend with a gross assessed value of $1,000,000. He also owns a homestead in the same county with a gross assessed value of $400,000. The county tax rate results in a preliminary tax of $12,000 on the commercial building and $5,000 on his homestead before any caps. After applying Indiana's Circuit Breaker, what is the combined maximum property tax David can be required to pay on both properties?
Correct Answer
D) $16,000
Option D is correct. The commercial property's 3-percent cap is $30,000, so its $12,000 preliminary tax is unchanged. The homestead's 1-percent cap is $4,000, reducing its $5,000 preliminary tax to $4,000. The combined final tax is $12,000 plus $4,000, or $16,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
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.
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