1. Lesson 39
Property Tax
Text: Chapter 1, section 7
$ Local municipalities raise revenue in two basic ways:
1) Grants from other levels of government
2) Property taxes
$ Property taxes are paid according to the assessed value of your property.
$ An assessor (after examine your property) gives a value based on market value.
Residential property tax is based on 45% of this assessed value; this 45% is called
the portioned assessment.
$ After examine the budget for the town or city the municipal government decides
on a rate of property tax for the city.
$ The school division also collects taxes from properties. It is a separate rate but it
is collected with the local taxes.
$ Local improvements to the city, such as, sidewalks, sewer upgrades, etc are
charged to the home owners on the frontage of a lot. Local improvements are
usually charged in installments per year. For example, sidewalk construction may
be charged at a rate of $3.58 per foot of frontage each year for 5 years.
$ Rate of property tax = Total tax to be raised
Total assessed value of the property
$ Tax rate is usually expressed as a permille (which is a thousandth of a dollar).
This is also more common called the MILL RATE.
1 th
$ A mill is of a dollar.
1000
$ So a rate of 50 mills means that you will pay $50 for every $1000 your property
is worth.

2.  Mill rate = Total taxes to be raised
x 1000
Total assessed value of the property
Example:
In Thompson, the city council has decided that they need to increase the taxes by
$21 250 000. The total assessment of the property is $450 000 000. Find the tax rate
and express it in:
A) cents per dollar
B) percent
C) mills
Example:
The Scallion’s house has a market value of assessment of $90 000. Taxes will be paid on
the portioned assessment of 45%% The mill rate in Thompson is 43 mills. What will
.
Ms. Scallion owe in property tax?
Exercise 39: Q 1 to 15