Marcus owns a home in Hattiesburg, Mississippi with a true (appraised) value of $250,000. He qualifies for and has applied the Mississippi homestead exemption. The local millage rate is 80 mills. What is Marcus's annual ad valorem property tax bill?
Correct Answer
B) $1,400
Step 1: Calculate assessed value: $250,000 true value x 10% residential assessment ratio = $25,000 assessed value. Step 2: Apply the Mississippi homestead exemption: $25,000 - $7,500 = $17,500 net taxable assessed value. Step 3: Convert the millage rate: 80 mills = 80 / 1,000 = 0.080. Step 4: Calculate the tax: $17,500 x 0.080 = $1,400. The correct answer is B.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
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