What does the effective tax rate represent?

The effective tax rate represents the ratio between the market value of a property and the current taxes assessed on that property. This rate provides important insight into the tax burden placed on a property owner relative to the market value of their property, allowing for a clearer understanding of how taxation correlates with property worth. It is a critical metric for assessing how much of a property's value is being collected as tax, reflecting the local government's revenue structure in relation to the overall real estate market.

Evaluating this measure helps assessors and appraisers to analyze the fairness and equity of tax distribution among properties within the jurisdiction, thereby informing decisions related to property taxes and valuations.