Common Level Ratio's

[cushie0105]

What formula is used to find the county's estimate of market value using the Common Level Ratio?

Example:

My commercial property assessment:
LAND: $117,800
BUILDING: $273,000
TOTAL: $390,800

2011-2012 Common level ratio 1.25 - PA Dept. of Revenue


thanks,

 

[CBBoston]

I'm guessing, its a multiplier to bring that county, or whatever they use there, to the same levels of other counties. Aren't the state's assessing rules on-line?

 

[Bearslide]

The common level ratio is different from county to county. In many cases, here at least, with or without the multiplier factored in, the assessed value is way off current market values. The assessors office here is very willing to share information and formulas - I would call your assessor's office directly and start there.

 

[Pittsburgh Pete]

Your assessment is your assessment--based on a predetermined ratio. In our County that ratio is currently 100% of market value in 2002 (we are currently undergoing a reassessment). The common level ratio is the relationship between the predetermined ratio and the assessed value. Currently, the State Tax Equalization Board (STEB) indicates that our common level ratio is 85%+/-. That means that based on current market activity, that the assessed values are only at 85% of the predetermined ratio. Once the common level ratio diverges from the predetermined ratio by more than 15%, the common level ratio can be used to determine assessed values.

 

[Pittsburgh Pete]

Common level ratios are expressed as a percentage. I'm assuming the 1.25 indicates that your assessments are at 80% of market value (1/1.25 = .80). You divide the assessment by the common level ratio to determine market value--$390,800/.80 = $488,500.

 

[Pittsburgh Pete]

FYI--this from the STEB website:

CERTIFICATION OF MARKET VALUE

The primary function of the Board is to determine annually the aggregate market value of taxable real property in each political subdivision and school district throughout the Commonwealth of Pennsylvania. Legislative restrictions as stipulated in Section 7 (3) and Section 14 of Act 447, determine the computation procedure to be used in an odd or even year.

The market values are certified annually to the Department of Education and the respective school districts on or before July 1 of each year. These market values are used by the Department of Education as one factor in a legislative formula for the distribution of the state subsidies to each school district.
COMMON LEVEL RATIO

This function of the Board is to establish a common level ratio of assessed value to market value for each county for the prior calendar year.
Act 267 of 1982 requires the State Tax Equalization Board to use statistically-acceptable techniques, to make the methodology for computing ratios public, and to certify the ratio of the chief assessor of each county each year.

 

[Walter Kirk]

New Jersey has a similar formula however it has many catigories of sales that are not used to calculate the ratio. This practice, as well as the failure to segregate property types makes the use of these ratios for anything but school funding misleading.

 

[Pittsburgh Pete]

The ratio is informational only--merely shows the relationship between the predetermined ratio and the actual assessments--although there is that sticky provision for using the common level ratio when it varies from the predetermined ratio by 15% or more. Bottom line is that the assessment is what the assessment is for calculating real estate taxes.