IAAO COURSE 101 REVIEW QUESTIONS
WITH CORRECT ANSWERS 2025/2026
Tax Rate (def.) - CORRECT ANSWER -Percent of assessed value at which each property is taxed in
a given district.
Tax Rate (formula) - CORRECT ANSWER -Tax revenue (amount) / Assessed value
Property Tax (formula) - CORRECT ANSWER -Subject assessed value / Tax rate
Budget Revenue (formula) - CORRECT ANSWER -Total budget - Other taxes
Effective Tax Rate (def.) - CORRECT ANSWER -Reflects the relationship between total property
taxes on real property and the property's market value.
Effective Tax Rate (formula) - CORRECT ANSWER -Assessment ratio (level) X Tax rate
Jurisdictions tax rate is derived by (formula) - CORRECT ANSWER -Budget revenue (budget -
other taxes) / Assessed value
Assessment Ratio (def.) - CORRECT ANSWER -Estimated fractional relationship between the
assessed values and market values of a group of properties.
Assessment Ratio (formula) - CORRECT ANSWER -Assessed value / Market value
Neighborhood Life Cycle - CORRECT ANSWER -Growth, Stability, Decline & Revitalization
, Principle of Conformity - CORRECT ANSWER -Value of a property depends on its relationship to
its surroundings; maximum market value is achieved when reasonable similarity among
improvements in the neighborhood.
Principle of Competition - CORRECT ANSWER -Created by the potential for profits; availability
must be in harmony with demand; if one or the other is in excess prices will decrease or
increase.
Principle of Balance - CORRECT ANSWER -Applied to an individual property; maximum value is
obtained when the four agents of production are balanced - land, labor, capital and
management.
Principle of Change - CORRECT ANSWER -Market value is never constant; estimate of market
value is only valid as of a specific date & changes in the market will impact future value
estimates.
Principle of Anticipation - CORRECT ANSWER -Value created by the expected future benefits
from the property; related to the Principle of Change.
Principle of Consistent Use - CORRECT ANSWER -Property must be valued with a single use for
the entire property; land cannot be valued with one use and improvements with another.
Principle of Contribution - CORRECT ANSWER -Value of component depends on its contribution
to the whole; basis for adjustments in the sales comparison approach.
Principle of Supply - CORRECT ANSWER -Amount of product producers are willing to sell under
various conditions during a given period.
Principle of Demand - CORRECT ANSWER -Amount of product producers are willing and able to
buy during a given period; given the choices available.
WITH CORRECT ANSWERS 2025/2026
Tax Rate (def.) - CORRECT ANSWER -Percent of assessed value at which each property is taxed in
a given district.
Tax Rate (formula) - CORRECT ANSWER -Tax revenue (amount) / Assessed value
Property Tax (formula) - CORRECT ANSWER -Subject assessed value / Tax rate
Budget Revenue (formula) - CORRECT ANSWER -Total budget - Other taxes
Effective Tax Rate (def.) - CORRECT ANSWER -Reflects the relationship between total property
taxes on real property and the property's market value.
Effective Tax Rate (formula) - CORRECT ANSWER -Assessment ratio (level) X Tax rate
Jurisdictions tax rate is derived by (formula) - CORRECT ANSWER -Budget revenue (budget -
other taxes) / Assessed value
Assessment Ratio (def.) - CORRECT ANSWER -Estimated fractional relationship between the
assessed values and market values of a group of properties.
Assessment Ratio (formula) - CORRECT ANSWER -Assessed value / Market value
Neighborhood Life Cycle - CORRECT ANSWER -Growth, Stability, Decline & Revitalization
, Principle of Conformity - CORRECT ANSWER -Value of a property depends on its relationship to
its surroundings; maximum market value is achieved when reasonable similarity among
improvements in the neighborhood.
Principle of Competition - CORRECT ANSWER -Created by the potential for profits; availability
must be in harmony with demand; if one or the other is in excess prices will decrease or
increase.
Principle of Balance - CORRECT ANSWER -Applied to an individual property; maximum value is
obtained when the four agents of production are balanced - land, labor, capital and
management.
Principle of Change - CORRECT ANSWER -Market value is never constant; estimate of market
value is only valid as of a specific date & changes in the market will impact future value
estimates.
Principle of Anticipation - CORRECT ANSWER -Value created by the expected future benefits
from the property; related to the Principle of Change.
Principle of Consistent Use - CORRECT ANSWER -Property must be valued with a single use for
the entire property; land cannot be valued with one use and improvements with another.
Principle of Contribution - CORRECT ANSWER -Value of component depends on its contribution
to the whole; basis for adjustments in the sales comparison approach.
Principle of Supply - CORRECT ANSWER -Amount of product producers are willing to sell under
various conditions during a given period.
Principle of Demand - CORRECT ANSWER -Amount of product producers are willing and able to
buy during a given period; given the choices available.
