CAE Assessment and Evaluation 4

Question 1

A home has a market value of $250,000, is assessed at 40% of market value, and the tax rate is 30 mills. What is its effective tax rate?

Accepted Answer

1.2%

Answer

Tax = $100,000 × 0.030 = $3,000, and $3,000 ÷ $250,000 = 1.2%.

Question 2

One mill of property tax equals:

Accepted Answer

$1 of tax per $1,000 of assessed value

Answer

A mill is one-thousandth of a dollar, so it equals $1 per $1,000 of assessed value.

Question 3

What is the main purpose of state-level assessment equalization?

Accepted Answer

To adjust for different assessment levels across jurisdictions so taxes and state aid are distributed fairly

Answer

Equalization factors bring jurisdictions with different assessment levels to a common basis.

Question 4

Which outlier trimming method does IAAO commonly recommend for ratio studies?

Accepted Answer

Excluding ratios beyond 1.5 times the interquartile range from the quartiles

Answer

IQR-based fences, usually 1.5 × IQR, are the standard way to identify extreme ratios.

Question 5

Before running a ratio study, why might an assessor adjust sale prices for time?

Accepted Answer

To account for market price changes between the sale date and the assessment date

Answer

Time adjustments put sales on the same basis as the valuation date when the market is changing.

CAE - Certified Assessment Evaluator Practice Test