IAAO Course 101 Review; Questions &
Answers 100 Solved
Tax Rate (def.) Percent of assessed value at which each property is taxed in a
given district.
Tax Rate (formula) Tax revenue (amount) / Assessed value
Property Tax (formula) Subject assessed value / Tax rate
Budget Revenue (formula) Tot...
IAAO Course 101 Review; Questions &
Answers 100 Solved
Tax Rate (def.) ✔✔Percent of assessed value at which each property is taxed in a
given district.
Tax Rate (formula) ✔✔Tax revenue (amount) / Assessed value
Property Tax (formula) ✔✔Subject assessed value / Tax rate
Budget Revenue (formula) ✔✔Total budget - Other taxes
Effective Tax Rate (def.) ✔✔Reflects the relationship between total property
taxes on real
property and the property's market value.
Effective Tax Rate (formula) ✔✔Assessment ratio (level) X Tax rate
Jurisdictions tax rate is derived by (formula) ✔✔Budget revenue (budget -other
taxes) / Assessed
value
Assessment Ratio (def.) ✔✔Estimated fractional relationship between the
assessed values and
market values of a group of properties.
Assessment Ratio (formula) ✔✔Assessed value / Market value
Neighborhood Life Cycle ✔✔Growth, Stability, Decline & Revitalization
, IAAO Course 101 Review; Questions &
Answers 100 Solved
Principle of Conformity ✔✔Value of a property depends on its relationship to its
surroundings;
maximum market value is achieved when reasonable similarity among
improvements in the
neighborhood.
Principle of Competition ✔✔Created by the potential for profits; availability
must be in harmony
with demand; if one or the other is in excess prices will decrease or increase.
Principle of Balance ✔✔Applied to an individual property; maximum value is
obtained when the
four agents of production are balanced - land, labor, capital and management.
Principle of Change ✔✔Market value is never constant; estimate of market value
is only valid as
of a specific date & changes in the market will impact future value estimates.
Principle of Anticipation ✔✔Value created by the expected future benefits from
the property;
related to the Principle of Change.
Principle of Consistent Use ✔✔Property must be valued with a single use for the
entire property;
, IAAO Course 101 Review; Questions &
Answers 100 Solved
land cannot be valued with one use and improvements with another.
Principle of Contribution ✔✔Value of component depends on its contribution to
the whole; basis
for adjustments in the sales comparison approach.
Principle of Supply ✔✔Amount of product producers are willing to sell under
various conditions
during a given period.
Principle of Demand ✔✔Amount of product producers are willing and able to
buy during a
given period; given the choices available.
Principle of Increasing & Decreasing Returns ✔✔Addition of successive
increments of one
agent of production will decrease future incomes or amenities; or additions of
successive
increments of one agent of productions added, future income or amenities will
increase to a
point.
Principle of Progression ✔✔Association with better properties of the same type
increase value of
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