Compute gross amount of property taxes required to be levied

Assignment Help Accounting Basics

Reference no: EM131971694

Problem

Riyadh is the capital and most populous city of Saudi Arabia. It is also the capital of Riyadh Province and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to more than 8 million people. The city is divided into 15 municipal districts, managed by Riyadh Municipality headed by the mayor of Riyadh, and the Riyadh Development Authority, chaired by the governor of Riyadh Province, Faisal bin Bandar Al Saud.

Riyadh Municipal Corporation is preparing its budget for calendar year 2017. After estimating revenues from all different sources like property tax, the Riyadh Municipality came to a conclusion that it will collect SAR 7,000,000 and also estimated uncollectible property taxes will be SAR 70,707. In addition, Riyadh Municipality is having a total estimated property at the beginning of beginning of 2013 is SAR 65,000,000 and it is expected that there will be reduction in assessed value from appeals to an amount of SAR 200,000. The corporation Assessed value of property, not subject to tax is SAR 1,400,000, and Adjustments to assessed values for senior citizen exemptions is SAR 1,000,000

Required:

a. Compute the gross amount of property taxes required to be levied.

b. Compute the tax rate per SAR100 of net assessed valuation.

c. Determine the amount of property tax that a home owner whose property is assessed at SAR35,000 will have to pay.

Reference no: EM131971694

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