Real Estate Math

A Vermont property's Vermont Property Transfer Tax on a $500,000 purchase is calculated as follows: 0.5% on the first $100,000 plus 1.25% on the remaining $400,000. What is the total PTT?

A$5,000
B$5,500✓ Correct
C$6,250
D$4,675

Explanation

PTT on first $100,000 = $100,000 × 0.005 = $500. PTT on remaining $400,000 = $400,000 × 0.0125 = $5,000. Total PTT = $500 + $5,000 = $5,500.

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