A New Hampshire town has an equalization ratio of 80% and a tax rate of $20 per $1,000 of assessed value. A property in the town has a market value of $350,000. What is the property's assessed value, and approximately how much will the owner owe in annual property taxes?
Correct Answer
D) Assessed value: $280,000; annual taxes: $5,600
Step 1 — Calculate assessed value using the equalization ratio: Assessed Value = Market Value × Equalization Ratio = $350,000 × 0.80 = $280,000. Step 2 — Calculate annual property tax: Tax = (Assessed Value ÷ $1,000) × Tax Rate = ($280,000 ÷ $1,000) × $20 = 280 × $20 = $5,600. In New Hampshire, the NH Department of Revenue Administration sets equalization ratios to reflect the relationship between assessed values and market values. A ratio of 80% means the town assesses property at 80% of market value.
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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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