A property in Bangor, Maine has an assessed value of $320,000. The municipality's mill rate is 15 mills. The owner qualifies for the Maine Homestead Exemption of $25,000. What is the owner's annual property tax bill?
Correct Answer
A) $4,425.00
Step 1 — Apply the Homestead Exemption: Taxable value = Assessed value − Homestead Exemption = $320,000 − $25,000 = $295,000. Step 2 — Convert mill rate to decimal: 15 mills = 15 ÷ 1,000 = 0.015. Step 3 — Calculate annual tax: $295,000 × 0.015 = $4,425.00. The correct annual property tax bill is $4,425.00.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
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