Sandra, a Kentucky real estate licensee, is representing a buyer purchasing a home from an estate. The estate's personal representative tells Sandra that the property's PVA assessed value is $195,000, but a recent independent appraisal values the property at $230,000. The buyer is concerned about future property taxes. Sandra correctly explains Kentucky's assessment standard. Which of the following statements best reflects Kentucky law regarding how this property should be assessed for ad valorem tax purposes?
Correct Answer
B) The PVA must assess the property at 100% of its fair cash value; the independent appraisal at $230,000 is stronger evidence of current fair cash value and could support a reassessment
Under KRS 132.190, all property must be assessed at 100% of fair cash value. Fair cash value is defined as the price a property would bring at a voluntary arm's-length sale. The PVA's current assessed value of $195,000 and the independent appraisal of $230,000 are both evidence of fair cash value, but the independent appraisal is a more current and comprehensive valuation. The PVA has the authority and obligation to update assessments to reflect current fair cash value, and an independent appraisal can be used as evidence to support a reassessment — either by the PVA proactively or through the taxpayer's appeal process if the PVA's figure is too low.
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
Common Mistakes to Avoid on Valuation Questions
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.
More Valuation Questions
In Utah, property taxes are collected by which governmental entity?
In Utah, how is a primary residence assessed for property tax purposes under the residential exemption?
Which of the following best describes how Utah's rapid population growth, driven partly by Silicon Slopes tech expansion, has affected housing affordability?
When appraising a property in Utah's Wasatch Front, which environmental hazard would an appraiser need to consider that is less common in most other states?
The rapid growth of the 'Silicon Slopes' tech corridor in Utah has most directly affected real estate in which area?
- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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
Related Articles
Appraisal & Valuation for the Real Estate Exam (2026): CMA, Comps, Cap Rate + Examples
Learn the three approaches to value, CMA basics, and cap rate questions with examples and practice.
How to Study Real Estate Valuation Questions Without Mixing Price and Value
A topic that feels clear in notes can still fail in practice if recall has not caught up with recognition. If you are searching for study real estate...
How to Study Real Estate Finance Topics Without Letting Loan and Valuation Terms Blur Together
Use a cleaner study system for real estate finance topics so loan terms, valuation language, and formulas stop blending together.