Real Estate Math
A Minnesota property has a market value of $425,000. The local homestead class rate is 1% for the first $500,000. The local tax rate is 110 mills. What is the estimated annual property tax?
A$4,675✓ Correct
B$4,250
C$46,750
D$5,100
Explanation
Tax capacity = $425,000 x 1% = $4,250. Annual tax = Tax capacity x Tax rate = $4,250 x (110/1000) = $4,250 x 0.
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