Wisconsin Real Estate Sales Practice Exam

To calculate the annual tax bill, first, determine the assessed value of the property. The assessed value is a percentage of the market value; in this case, it is assessed at 90% of the market value of $136,000.

Calculating the assessed value involves multiplying the market value by the assessment ratio:

Assessed Value = Market Value x Assessment Ratio

Assessed Value = $136,000 x 0.90 = $122,400

Next, to compute the property tax, the assessed value is multiplied by the mill rate. The mill rate indicates the amount of tax per $1,000 of assessed value. When dealing with mill rates, it is essential to convert the rate into a dollar amount for the assessed value:

Property Tax = (Assessed Value / 1,000) x Mill Rate

Property Tax = ($122,400 / 1,000) x 20

Property Tax = $122.4 x 20 = $2,448

Thus, the annual tax bill for the property is $2,448. This calculation reflects the direct relationship between the assessed value and the mill rate, which are essential components in determining property taxes.