What does a Price Related Differential (PRD) greater than 1.00 indicate?

A Price Related Differential (PRD) greater than 1.00 indicates that lower priced properties are assessed at a higher percentage of their market value compared to higher priced properties. This suggests that the assessment practices may disproportionately affect different segments of the housing market, leading to inequities in property tax burdens.

Essentially, a PRD greater than 1.00 shows that as the value of properties increases, the assessment ratios tend to decrease, meaning that lower value properties are typically assessed more favorably (at higher percentages of their market value) than higher value properties. This can signify a potential regression in assessment quality, as ideally all properties should be assessed uniformly according to their market values, maintaining fairness in taxation.

This concept is important because it highlights the potential issues in property tax assessments and indicates that there may be underlying factors at play in how properties are valued and taxed in a given area. Understanding the implications of the PRD on assessment practices is crucial for ensuring equitable treatment among property owners.