Tuesday, December 19, 2017

A Good Property Assessment System Allows Easy Comparison of County vs. Town Ratios

Countywide Sales Ratio
(Click on the image to enlarge)
    Over-assessed (Town-1)
(Click on the image to enlarge)
Under-assessed (Town-2)
(Click on the image to enlarge)
Sales Ratio (County Market Value to Adjusted Sales) is a better indicator of the proper assessment level than the Assessment Ratio (County Assessed Value to Adjusted Sales), as the latter often includes Town-wise special assessment, abatement, exemption, etc. 

All sales therefore must be adjusted to the taxable status date so the two values (county vs. town) are comparable and the resulting ratios are statistically significant. 

In this example, since the Countywide Median Sales Ratio is .743, all Towns in that County must be valued at or close to this ratio so that the Assessment Roll becomes fair and equitable. Better yet, compare the 25th to 75th percentile of the ratio curve. If the sales are individually validated for ratio eligibility (ours are not), a much wider range – say, 5th to 95th - could be considered.

The Town-1 however shows a significantly higher Median Sales Ratio (.831), making it an over-assessed Town in that County.

The Town-2, on the other hand, shows a much lower  Median Sales Ratio (.7), making it an under-assessed Town in that County.

While this is the Town-wise summary of ratios, in a separate Blog post we will further drill down to the areas in the Town - spatially - where the incidence of over and under assessments could be more severe. 

I picked the above graphic from TownAnalyst.com as I own and operate it, to avoid having to deal with any copyright issues. My TownAnalyst site is totally free (no strings) and requires no login or registration whatsoever. Please use the assessment evaluation system that works best for you.


Disclaimer: This analysis is strictly illustrative. Any commercial or legal use of it is totally prohibited. Always consult a Tax Attorney on statutory requirements.     

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