How is the Sales to Assessment Ratio calculated?

The Sales to Assessment Ratio is an important metric used to evaluate the fairness and accuracy of property assessments in relation to the market value established by recent sales. This ratio is specifically calculated by taking the assessed value of a property and dividing it by the actual selling price of that property.

This ratio helps to determine whether properties are being assessed fairly across a jurisdiction. A ratio of 1.0 indicates that the assessed value matches the market value, while ratios above or below 1.0 can indicate whether properties are being over-assessed or under-assessed relative to the market.

The approach of dividing assessed value by actual selling price allows appraisers and assessors to directly compare how closely the assessed valuation aligns with the real-world transaction values, making it a reliable tool for assessing overall assessment practices. Understanding this calculation is essential for assessing equity among property valuations and making necessary adjustments to improve assessment accuracy.