The tax rate on Harriet Walker’s $80,000 vacation home is 20 mills. The property is assessed at full value. How much will Harriet Walker pay in taxes this year?
The correct answer and explanation is:
To calculate Harriet Walker’s property tax, we use the mill rate and the assessed value of the property.
🔢 Step-by-Step Calculation
- Understanding “mills”:
- 1 mill = 1/1000 of a dollar = $0.001
- 20 mills = 20 × $0.001 = $0.020
- Assessed Value:
- The property is assessed at full value, which means $80,000.
- Tax Calculation: Tax=Assessed Value×Mill Rate\text{Tax} = \text{Assessed Value} \times \text{Mill Rate} Tax=80,000×0.020=1,600\text{Tax} = 80,000 \times 0.020 = \boxed{1,600}
✅ Final Answer:
Harriet Walker will pay $1,600 in property taxes this year.
📘 300-Word Explanation:
Property taxes are commonly assessed using a unit called a “mill.” One mill represents one-tenth of a cent, or $0.001. When a property is taxed at a rate of “20 mills,” this means the property owner pays $0.020 (20 × 0.001) in taxes for every $1 of assessed value.
In Harriet Walker’s case, her vacation home is worth $80,000, and it is assessed at its full market value. That means the entire $80,000 is subject to taxation—no discounts or partial assessments apply.
To calculate how much she owes, multiply the assessed value of the property by the mill rate expressed as a decimal: 80,000×0.020=1,60080,000 \times 0.020 = 1,600
Thus, her total property tax for the year would be $1,600.
Mill rates are typically set by local government entities, such as counties or municipalities, and they help fund local services like schools, police, and fire departments. The assessed value of a property is determined by a tax assessor and can sometimes differ from the market value. However, in this problem, it is specified that the property is assessed at full value.
Understanding how mill rates work helps homeowners predict and plan for property tax obligations more accurately.