PSI Virginia Real Estate Practice Exam

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Prepare for the PSI Virginia Real Estate Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What primary function does property taxes serve?

Funding local government operations
Reducing property values
Encouraging real estate investment
Promoting residential development

The correct answer is: Funding local government operations

The primary function of property taxes is to fund local government operations. Property taxes provide a crucial source of revenue for municipalities, which rely on these funds to maintain essential services such as public education, law enforcement, infrastructure (like roads and public transport), sanitation, and other community services. This revenue is vital for the overall functioning and development of local governments, ensuring they can meet the needs of their residents. The other options, while related to real estate and local government in various ways, do not represent the primary function of property taxes. Reducing property values, encouraging real estate investment, and promoting residential development are not direct objectives of property taxation. Instead, property taxes are a necessary mechanism used by local governments to sustain their operations and support community welfare.