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Simple English definitions for legal terms
assessment ratio
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A quick definition of assessment ratio:
Assessment Ratio: The assessment ratio is a number used to determine how much a property is worth for tax purposes. It is the ratio of the assessed value of a property to its fair market value. The assessed value is the value assigned to a property by the government for tax purposes, while the fair market value is the price that a property would sell for on the open market. The assessment ratio is used to calculate property taxes, with higher ratios resulting in higher taxes.
A more thorough explanation:
An assessment ratio is a term used in property taxation to refer to the ratio of the assessed value of a property to its fair market value. The assessed value is the value assigned to a property by the local government for tax purposes, while the fair market value is the estimated value of the property if it were to be sold in an open market.
For example, if a property has an assessed value of $100,000 and a fair market value of $200,000, the assessment ratio would be 50% ($100,000/$200,000).
The assessment ratio is used to determine the amount of property tax that a property owner is required to pay. In some states, the assessment ratio is fixed by law, while in others it may vary depending on the type of property or its location.
Assessment ratios are important because they ensure that property owners are paying their fair share of taxes based on the value of their property. They also help to prevent overtaxation or undervaluation of properties.