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mr. smith has a house assessed at 51,000(60 percent of its sale value). His tax rate...

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Finance

mr. smith has a house assessed at 51,000(60 percent of its salevalue). His tax rate is 3.50 per 100AV. mrs. jones has a houseassessed at 35,550(45 percent of its sale value). Her tax rate is36.2 mills. Who pays the greater tax

Answer & Explanation Solved by verified expert
3.8 Ratings (684 Votes)

Tax paid by:

a) Mrs Jones = Assessed Value * Tax Rate

                      = 35550*36.2*1/1000 (or 3.62%)

                      = 1286.91

b) Mr Smith   = Assessed Value * Tax Rate

                      = 51000*3.5%

                      = 1785

Thus, Mr Smith has to shell out more on property taxes in the given case.

Note: The term millage rate (also referred to as the mill rate or the effective property tax rate) gets its name from the Latin word "millesimum," or "mill" for short, which means "thousandth part" (1/1000). Thus, 36.2 mills = 36.2*1/1000 i.e. 0.0362 or 3.62%.

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