A commercial property in Fargo, North Dakota has a market value of $480,000. North Dakota assesses commercial property at 50% of true and full value for property tax purposes. The local mill levy is 120 mills. What is the annual property tax owed on this property?
Correct Answer
A) $2,880
North Dakota commercial property tax is calculated from taxable value. The property has a true and full value of $480,000; commercial taxable value is 5% of true and full value, so taxable value is $24,000. A 120-mill levy equals 0.120. Annual tax is $24,000 × 0.120 = $2,880. Therefore option A is correct.
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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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