How is the Effective Tax Rate calculated?

The Effective Tax Rate is calculated by dividing actual taxes by the estimated market value of the property. This calculation provides a clear percentage that represents the burden of property taxes relative to the market value, which is an essential metric for property owners and assessors alike.

While adding all property assessments and multiplying the assessment level by the tax rate have their roles in the broader context of property taxation, they do not directly yield the Effective Tax Rate. The addition of all property assessments is relevant for understanding the total taxable base but does not give an effective rate for an individual property. Similarly, multiplying the assessment level by the tax rate determines the amount of tax owed for a specific property rather than establishing the effective tax rate in relation to market value.

In this context, since the Effective Tax Rate focuses on the relationship between actual taxes paid and market value, the most accurate definition encompasses the division of actual taxes by the estimated market value of the property. Therefore, the answer provided reflects a comprehensive understanding of how various components contribute to the overall calculation of the Effective Tax Rate.