A commercial property in Utah County has a fair market value of $800,000 as determined by the county assessor. The combined mill levy for all taxing entities (county, city, school district, and special districts) is 12.5 mills. Utah assesses most real property at 100% of fair market value. What is the annual property tax owed on this property?
Correct Answer
B) $10,000
Step 1 — Determine assessed value: Under Utah Code § 59-2-103, most real property is assessed at 100% of fair market value. Assessed Value = $800,000 × 100% = $800,000. Step 2 — Convert mill levy to decimal: 1 mill = $1 per $1,000 of assessed value, so 12.5 mills = 12.5 ÷ 1,000 = 0.0125. Step 3 — Calculate annual tax: $800,000 × 0.0125 = $10,000. The annual property tax is $10,000.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
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.
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