A buyer is purchasing a warehouse in Columbia, Missouri that the seller has listed at its true market value of $500,000. The buyer's lender asks the buyer to estimate the property's assessed value for tax planning purposes. Using Missouri's correct assessment ratio for this property type, what assessed value should the buyer report?
Correct Answer
D) $160,000, using the commercial assessment ratio of 32%
A warehouse is classified as commercial/industrial property in Missouri. Under Missouri's tiered assessment system, commercial and industrial property is assessed at 32% of true (market) value. $500,000 × 32% = $160,000 assessed value. This is the figure the buyer should report for tax planning purposes.
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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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- → The income approach to appraisal is most commonly used for which type of property?
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- → External obsolescence in Oklahoma:
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- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
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- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
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