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Formula – Adjusted Assessment Ratio
[P (1+i)y]/A = R
P – Asking price
i – Average yearly increase in assessed value
y – Years since most recent assessment
A – Assessed value
R – Assessment ratio
The adjusted assessment ratio is used when the assessment ratio does not show an accurate reflection of market behavior. This is so that more material variable are taken into consideration.
In this upgraded equation, the element of years since last assessment and the average yearly increase in assessed value gives the ratio more credibility and reliability.
Expressed as a percentage, the result will be very useful when using data to compare properties.
Be mindful that the resulting figures are only estimates and should not be fully relied upon as a sole decision criteria.