How is the Sales Ratio calculated?

The Sales Ratio is calculated by dividing the assessed value by the sales price. This ratio is a crucial measure used in real estate appraisal to evaluate how closely the assessed value of a property aligns with its market value, represented by the sales price.

A ratio greater than 1 indicates that the assessed value is higher than the sales price, suggesting that a property may be over-assessed for tax purposes. Conversely, a ratio less than 1 suggests that the property might be under-assessed. This understanding helps assessors ensure fairness and equity in property taxation by comparing assessed values against actual market transactions.

The approach of using the assessed value in relation to the sales price reflects the primary intent of the Sales Ratio: to determine the effectiveness and accuracy of property assessments in representing market conditions.