Property ValuationIntermediateAlaska Exam

Assessed value in Alaska municipalities is used to:

AEstablish the property's listing price
BCalculate ad valorem (property) taxesCorrect
CDetermine the appropriate mortgage amount
DSet insurance replacement cost

Why Calculate ad valorem (property) taxes Is Correct

Answer B: Calculate ad valorem (property) taxes

Assessed value is the value determined by the local tax assessor for the purpose of calculating property taxes (ad valorem taxes — taxes according to value). It may differ significantly from market value.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

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