If a commercial property has a market value of $2,000,000, what is the assessed value assuming an assessment ratio of 15%?

To determine the assessed value of a commercial property based on its market value and the assessment ratio, you use the following formula:

Assessed Value = Market Value × Assessment Ratio

In this scenario, the market value of the commercial property is given as $2,000,000, and the assessment ratio is 15%, or 0.15 when expressed as a decimal.

Calculating the assessed value involves multiplying the market value by the assessment ratio:

Assessed Value = $2,000,000 × 0.15 = $300,000

This calculation illustrates that the assessed value, which impacts taxation and valuation for property taxes, is indeed $300,000. Recognizing that the assessed value does not represent the full market value but a percentage of it is critical in the evaluation of property assessments in accordance with local tax regulations. The correct calculation reflects the standardized approach employed by assessors to establish property values for taxation, ensuring that property owners understand the financial implications of their assessed values.