Maria owns a single-family home in Providence, Rhode Island. The city assessor has determined that her property has an assessed value of $320,000. Providence applies an assessment ratio of 100% of full market value. The current tax rate is set at $24.56 per $1,000 of assessed value. Which term best describes the $24.56 per $1,000 figure used to calculate Maria's annual property tax bill?
Correct Answer
D) Mill rate
The figure expressed as dollars per $1,000 of assessed value (or equivalently, mills per dollar) is called the mill rate or tax rate. In Rhode Island municipalities, property tax bills are calculated by multiplying the assessed value by the mill rate. One mill equals $1 per $1,000 of assessed value, so $24.56 per $1,000 is a mill rate of 24.56 mills. This is the standard terminology used by Rhode Island city and town tax assessors.
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Related Topics & Key Terms
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Related Concepts
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.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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