The effective tax rate is defined as what percentage in relation to the property's total value?

The effective tax rate is defined as the percentage of the annual real estate taxes in relation to the total value of the property. This calculation provides insight into the portion of a property’s value that is being collected in taxes by local governments.

Using annual real estate taxes in this context is significant because it reflects the actual tax burden imposed on property owners, allowing them to understand their tax obligations relative to the value of their asset. This is an essential concept for property owners, investors, and assessors as it aids in evaluating the financial performance of real estate investments and how tax policies impact property ownership.

The other options do not pertain to the calculation of effective tax rates in relation to property value. Total annual operating expenses, annual capital gains, and annual rental income describe different aspects of property management and investment analysis but do not directly inform the calculation of tax rates.