CAE Tax Policy and Assessment Administration Flashcards

In the context of property tax, what does 'ad valorem' mean?

Answer: According to value

Ad valorem is a Latin term meaning 'according to value,' signifying that property taxes are based on the assessed value of the property.

Which entity in most U.S. states is responsible for administering exemptions such as the homestead exemption?

Answer: Local county or municipal assessor

In most U.S. states, the local county or municipal assessor administers property tax exemptions, including the homestead exemption for owner-occupied residences.

What is the primary purpose of a triennial reassessment cycle in a jurisdiction?

Answer: To ensure assessed values are periodically updated to reflect current market conditions

A reassessment cycle ensures that assessed values are periodically updated so they reflect current market conditions and maintain assessment uniformity.

Which of the following is an example of a special assessment in property taxation?

Answer: A levy for sewer installation benefiting specific properties

A special assessment is a charge levied against specific properties that directly benefit from a public improvement, such as a new sewer line or road paving.

What does the term 'tax increment financing (TIF)' involve in relation to property assessment?

Answer: Freezing the assessed value base and dedicating future tax increment to redevelopment

TIF freezes the base assessed value and dedicates any future increase in tax revenue (the increment) to fund redevelopment within a designated district.

Which classification of property typically receives the lowest tax rate in a split-rate or classified property tax system?

Answer: Owner-occupied residential property

In classified property tax systems, owner-occupied residential property typically receives the lowest assessment ratio or tax rate as a matter of policy to protect homeowners.