Question
In: Finance
The City of Pawnee, IN (not a real city) is planning to build a new hospital...
The City of Pawnee, IN (not a real city) is planning to build a new hospital next year that has a property value of $100 million. The Pawnee government plans to keep the property tax rate the same every year and to provide the same government services as they did last year. That is, the total budgeted expenditures and income from other sources will remain unchanged. Note: This question does not require any numerical calculations.
- Will the average amount of property taxes paid by property owners in Pawnee will increase, decrease, or stay the same.
- Explain your reasoning by using the tax rate formula and your knowledge about property tax exemptions.
Solutions
Expert Solution
1) Pawnee IN, is a city in the state of Indiana in the USA. The property tax rates vary from one state to another in the US. The tax rates further vary in each county. The average amount of property tax paid by owners may change (increase or decrease) or stay the same. This is because of the various factors affecting the tax calculation.
2) Being a city in Indiana, property taxes are calculated by multiplying the assessed value by 0.7090.
In Indiana, the property tax is based on the market value of the property and not on the true value, as per the reassessment in 2002. Normally, the rates may change but the amount of tax may not vary significantly. There are a few tax exemptions for senior citizens. So, if the property owner is above 65 years age then there will be tax exemptions. Also, the market value may be changed in case of sale of property or any year in which they conduct reassessment.
jeff jeffy answered 2 years agoRelated Solutions
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