Real Estate Math
The ratio of a municipality's total assessed value to its total market value, used to ensure equitable taxation across jurisdictions.
The equalization rate represents the relationship between assessed values and market values in a taxing jurisdiction. If a municipality assesses property at 50% of market value, the equalization rate is 50%. The rate is used to distribute tax burdens fairly among jurisdictions in the same county or school district. It is also used in real estate math to convert between assessed value and market value: Market Value = Assessed Value ÷ Equalization Rate.
Exam Tip
Market Value = Assessed Value ÷ Equalization Rate. If assessed value is $100,000 and equalization rate is 40%, market value is $250,000.
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Real Estate Math
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