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Middletown levies its real-estate tax as a percentage of a property's 19 Dec 2023, 08:14
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Which of the following most logically completes the passage?

Middletown levies its real-estate tax as a percentage of a property's assessed value. Middletown reassessed all properties late last year, ensuring that this year's real-estate tax on a given property fairly reflects that property's current value. By comparison with the previous assessment three years ago, the average assessed property value was considerably lower. Nevertheless, the average realestate tax bill sent to Middletown's property owners this year is likely to be no lower than last year's, because.

A. the assessed value of relatively modest properties in Middletown went down more, on average, than that of more valuable properties

B. actual selling prices of properties sold in Middletown so far this year have been higher, on average, than assessed values

C. a likely consequence of declining real-estate values in Middletown will be a general slowdown in the local economy

D. there have been many real-estate transactions over the last year, and many current property owners did not own Middletown property a year ago

E. the real-estate tax rate in Middletown has not been set for this year, but will probably be higher than last year's rate


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Middletown levies its real-estate tax as a percentage of a property's 24 Dec 2023, 09:25
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Please help by providing the reasoning. Thank you in advance.
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Middletown levies its real-estate tax as a percentage of a property's 24 Dec 2023, 10:46
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Please help by providing the reasoning. Thank you in advance.
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Tax = Value of Property x Tax Rate x No of Tax Payers

Only options left are (D) & (E)

If (D) is true, it means Value of Property & No of Tax Payers, what if the Value of Property is significantly low, then no of tax payers will not affect much....

On the other hand if Tax Rate is increased significantly, then even if the Value of Property is less, it will lead to higher Property Tax Collection...

Hence, (E) hold better.
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Middletown levies its real-estate tax as a percentage of a property's 29 Jan 2024, 03:08
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GMATNinja KarishmaB MartyMurray AjiteshArun Bunuel

Hello Experts,

Can one of you please help decode this question? While I understood the question stem broadly, I could not understand any of the answer choices or even eliminate them. This was a question in the official gmat prep mock test, and I made an uneducated guess. It would help if someone can help with the argument breakdown and discuss each answer choice.

How do we go about approaching questions of this difficulty level?

Thanks in advance!
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Middletown levies its real-estate tax as a percentage of a property's 29 Jan 2024, 22:39
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SN_09
GMATNinja KarishmaB MartyMurray AjiteshArun Bunuel

Hello Experts,

Can one of you please help decode this question? While I understood the question stem broadly, I could not understand any of the answer choices or even eliminate them. This was a question in the official gmat prep mock test, and I made an uneducated guess. It would help if someone can help with the argument breakdown and discuss each answer choice.

How do we go about approaching questions of this difficulty level?

Thanks in advance!
Show more
Hi SN_09,

1. RE tax in California is levied as a % of a property's assessed value.

2. Late last year, California reassessed all properties.

3. Compared with the previous assessment 3 years ago, the mean assessed property value was considerably lower.

4. But the mean real-estate tax bill sent to California’s property owners this year is likely to be no lower than last year's. That is, this year's mean RE tax bill (based on the reassessed values) will be {equal to | higher than} last year's mean RE tax bill (based on the old assessed values).

We need to explain how the tax bill will not be lower even though assessed property value is lower. It's best to think of this as a paradox question.

Now, given that the tax is levied as a % of the assessed value, even if the assessed value goes down, we need to look at the other element of the bill (the %) before we can say whether the bill will go down or not. That is, if the % remains the same or goes down, we can be quite sure that the bill will also go down. However, if the % increases, we can't say whether the bill will go down, even if the assessed value is lower.

Bunuel
A. the assessed value of relatively modest properties in California went down more, on average, than that of more valuable properties
Show more
A. This option tells us that the assessed value of some properties dropped more, on average, that the assessed value of other properties. This gives us more information about the drop in assessed value. It doesn't change the fact that there's a drop in assessed value.

Bunuel
B. actual selling prices of properties sold in California so far this year have been higher, on average, than assessed values
Show more
B. We can remove this option because the RE tax is calculated as a % of assessed value. Actual selling price is irrelevant. Also, it's easy to imagine a situation in which only some houses are sold (maybe the ones that can get a good selling price), while most houses are not sold.

Bunuel
C. a likely consequence of declining real-estate values in California will be a general slow-down in the local economy
Show more
C. A general slowdown in the local economy doesn't help us understand why the tax bill be not be lower even though the mean assessed value is lower. Even if we stretch a bit, taxes are normally cut during slowdowns, so if the RE tax % is reduced, we would see the opposite outcome (lower RE tax bill).

Bunuel
D. there have been many real-estate transactions over the last year, and many current property owners did not own California property a year ago
Show more
D. We're looking at mean assessed value, and mean RE tax bill. Even if there are many new property owners, that will affect only the total (absolute) assessed value.

Bunuel
E. the real-estate tax rate in California has not been set for this year, but will probably be higher than last year's rate
Show more
E. Correct. If the % is likely to be higher, that increase could overcome the decrease in assessed value and lead to a higher (or not lower) mean RE tax bill.
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Middletown levies its real-estate tax as a percentage of a property's 30 Jan 2024, 09:41
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Okay, got this. Makes so much sense now.

Thank you so much for breaking this down!

AjiteshArun
SN_09
GMATNinja KarishmaB MartyMurray AjiteshArun Bunuel

Hello Experts,

Can one of you please help decode this question? While I understood the question stem broadly, I could not understand any of the answer choices or even eliminate them. This was a question in the official gmat prep mock test, and I made an uneducated guess. It would help if someone can help with the argument breakdown and discuss each answer choice.

How do we go about approaching questions of this difficulty level?

Thanks in advance!
Hi SN_09,

1. RE tax in California is levied as a % of a property's assessed value.

2. Late last year, California reassessed all properties.

3. Compared with the previous assessment 3 years ago, the mean assessed property value was considerably lower.

4. But the mean real-estate tax bill sent to California’s property owners this year is likely to be no lower than last year's. That is, this year's mean RE tax bill (based on the reassessed values) will be {equal to | higher than} last year's mean RE tax bill (based on the old assessed values).

We need to explain how the tax bill will not be lower even though assessed property value is lower. It's best to think of this as a paradox question.

Now, given that the tax is levied as a % of the assessed value, even if the assessed value goes down, we need to look at the other element of the bill (the %) before we can say whether the bill will go down or not. That is, if the % remains the same or goes down, we can be quite sure that the bill will also go down. However, if the % increases, we can't say whether the bill will go down, even if the assessed value is lower.

Bunuel
A. the assessed value of relatively modest properties in California went down more, on average, than that of more valuable properties
A. This option tells us that the assessed value of some properties dropped more, on average, that the assessed value of other properties. This gives us more information about the drop in assessed value. It doesn't change the fact that there's a drop in assessed value.

Bunuel
B. actual selling prices of properties sold in California so far this year have been higher, on average, than assessed values
B. We can remove this option because the RE tax is calculated as a % of assessed value. Actual selling price is irrelevant. Also, it's easy to imagine a situation in which only some houses are sold (maybe the ones that can get a good selling price), while most houses are not sold.

Bunuel
C. a likely consequence of declining real-estate values in California will be a general slow-down in the local economy
C. A general slowdown in the local economy doesn't help us understand why the tax bill be not be lower even though the mean assessed value is lower. Even if we stretch a bit, taxes are normally cut during slowdowns, so if the RE tax % is reduced, we would see the opposite outcome (lower RE tax bill).

Bunuel
D. there have been many real-estate transactions over the last year, and many current property owners did not own California property a year ago
D. We're looking at mean assessed value, and mean RE tax bill. Even if there are many new property owners, that will affect only the total (absolute) assessed value.

Bunuel
E. the real-estate tax rate in California has not been set for this year, but will probably be higher than last year's rate
E. Correct. If the % is likely to be higher, that increase could overcome the decrease in assessed value and lead to a higher (or not lower) mean RE tax bill.
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Middletown levies its real-estate tax as a percentage of a property's 27 Apr 2024, 22:59
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AjiteshArun

SN_09
GMATNinja KarishmaB MartyMurray AjiteshArun Bunuel

Hello Experts,

Can one of you please help decode this question? While I understood the question stem broadly, I could not understand any of the answer choices or even eliminate them. This was a question in the official gmat prep mock test, and I made an uneducated guess. It would help if someone can help with the argument breakdown and discuss each answer choice.

How do we go about approaching questions of this difficulty level?

Thanks in advance!
Hi SN_09,

1. RE tax in California is levied as a % of a property's assessed value.

2. Late last year, California reassessed all properties.

3. Compared with the previous assessment 3 years ago, the mean assessed property value was considerably lower.

4. But the mean real-estate tax bill sent to California’s property owners this year is likely to be no lower than last year's. That is, this year's mean RE tax bill (based on the reassessed values) will be {equal to | higher than} last year's mean RE tax bill (based on the old assessed values).

We need to explain how the tax bill will not be lower even though assessed property value is lower. It's best to think of this as a paradox question.

Now, given that the tax is levied as a % of the assessed value, even if the assessed value goes down, we need to look at the other element of the bill (the %) before we can say whether the bill will go down or not. That is, if the % remains the same or goes down, we can be quite sure that the bill will also go down. However, if the % increases, we can't say whether the bill will go down, even if the assessed value is lower.

Bunuel
A. the assessed value of relatively modest properties in California went down more, on average, than that of more valuable properties
A. This option tells us that the assessed value of some properties dropped more, on average, that the assessed value of other properties. This gives us more information about the drop in assessed value. It doesn't change the fact that there's a drop in assessed value.

Bunuel
B. actual selling prices of properties sold in California so far this year have been higher, on average, than assessed values
B. We can remove this option because the RE tax is calculated as a % of assessed value. Actual selling price is irrelevant. Also, it's easy to imagine a situation in which only some houses are sold (maybe the ones that can get a good selling price), while most houses are not sold.

Bunuel
C. a likely consequence of declining real-estate values in California will be a general slow-down in the local economy
C. A general slowdown in the local economy doesn't help us understand why the tax bill be not be lower even though the mean assessed value is lower. Even if we stretch a bit, taxes are normally cut during slowdowns, so if the RE tax % is reduced, we would see the opposite outcome (lower RE tax bill).

Bunuel
D. there have been many real-estate transactions over the last year, and many current property owners did not own California property a year ago
D. We're looking at mean assessed value, and mean RE tax bill. Even if there are many new property owners, that will affect only the total (absolute) assessed value.

Bunuel
E. the real-estate tax rate in California has not been set for this year, but will probably be higher than last year's rate
E. Correct. If the % is likely to be higher, that increase could overcome the decrease in assessed value and lead to a higher (or not lower) mean RE tax bill.
Show more
AjiteshArun
This one came up in Official mock-5, i got confused in the comparison of assessed values between the years. Now that i am reviewing, just wanted to understand whether my concerns are valid:

California reassessed all properties late last year, ensuring that this year's real-estate tax on a given property fairly reflects that property's current value.
In 2023, they assessed values for 2024.

By comparison with the previous assessment 3 years ago, the mean assessed property value was considerably lower.
In the previous assessment 3 years ago(2021), they must have assessed values for the next year(2022)
So, in previous assessment 3 years ago, which is 2021: Mean value of property for 2024 <<<< Mean value of property for 2022

Nonetheless, the mean real-estate tax bill sent to California’s property owners this year is likely to be no lower than last year's
Bill comparion of 2024 AND 2023.

Is it good comparison? Shouldn't we compare 2022 & 2024 AND NOT 2023 & 2024?
During the mock, i noticed this comparioson, and was searching for an option to highlight this.


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Middletown levies its real-estate tax as a percentage of a property's 03 Jun 2025, 22:36
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Bunuel
Which of the following most logically completes the passage?

Middletown levies its real-estate tax as a percentage of a property's assessed value. Middletown reassessed all properties late last year, ensuring that this year's real-estate tax on a given property fairly reflects that property's current value. By comparison with the previous assessment three years ago, the average assessed property value was considerably lower. Nevertheless, the average realestate tax bill sent to Middletown's property owners this year is likely to be no lower than last year's, because.

A. the assessed value of relatively modest properties in Middletown went down more, on average, than that of more valuable properties

B. actual selling prices of properties sold in Middletown so far this year have been higher, on average, than assessed values

C. a likely consequence of declining real-estate values in Middletown will be a general slowdown in the local economy

D. there have been many real-estate transactions over the last year, and many current property owners did not own Middletown property a year ago

E. the real-estate tax rate in Middletown has not been set for this year, but will probably be higher than last year's rate


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This is a Quant type CR.

Given: Real Estate Tax bill sent to an owner = tax rate * property's assessed value

The argument tells us that the new average assessed property value is considerably lower. So then if tax rate is the same, we can expect that the average real estate bill will also be lower.

Last sentence:
Nevertheless, the average realestate tax bill sent to Middletown's property owners this year is likely to be no lower than last year's, because__________

Then what could be the reason for the expectation of a similar average tax this year? Then the tax rate must be expected to be higher. Nothing else impacts the average tax bill per owner.
That is why option (E) is correct.


A. the assessed value of relatively modest properties in Middletown went down more, on average, than that of more valuable properties

Still, there is an overall decrease in assessed value.

B. actual selling prices of properties sold in Middletown so far this year have been higher, on average, than assessed values

Selling prices are irrelevant.

C. a likely consequence of declining real-estate values in Middletown will be a general slowdown in the local economy

Impact of declining values is irrelevant. Our real estate tax bill depends on only two things - tax rate and assessed value.

D. there have been many real-estate transactions over the last year, and many current property owners did not own Middletown property a year ago

This option tells us that there are many new owners. It doesn't mean that number of properties in MTown has increased. Even if the number of properties had increased, we are talking about the average assessed value and average tax bill. So number of properties is irrelevant.

Answer (E)

Here is a discussion on Best Completes kind of questions: https://youtu.be/02hcfVqIr-g
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