A Short Primer on the Equalization Ratio
In evaluating whether or not you believe your assessment is accurate, you need to apply the municipality’s equalization ratio against the assessed value. The best way to think of the equalization ratio is as a percentage of fair market value. For example, an equalization ratio of 96% means the assessed value is 96% of the municipality’s estimate of fair market value, while a ratio of 105% means the assessed value is 105% of the municipality’s estimate of fair market value. To equate your assessed value to fair market value, divide the assessed value by the equalization ratio, stated as a decimal. For example, if the assessed value is $2,500,000 and the equalization ratio is 105%, divide $2,500,000 by 1.05, which results in an equalized assessment of $2,380,952. In other words, the municipality believes the fair market value of your property is $2,380,952, not $2,500,000. Likewise, if the ratio is 96%, divide $2,500,000 by .96, which results in an equalized assessment of $2,604,167. In other words, the municipality believes the fair market value of your property is $2,604,167, not $2,500,000.
For additional information on the equalization ratio, please visit our [Equalization Ratio page].
Also of note….
Who is obligated to contribute toward the maintenance of a private road? This thorny issue has been the subject of much recent debate among the New Hampshire Real Estate Bar. Some people are surprised to learn no statute governs these situations. If covenants or other written agreements exist, then the issue is relatively easy to resolve; however, how about where there is no written agreement among the various stakeholders? The New Hampshire Supreme Court recently addressed this issue in Village Green Condominium Association v. Hodges (March 20, 2015). In Village Green, the Supreme Court ruled that where there is an express easement with a right (versus an obligation) to maintain a way which both the servient (the property burdened by the easement) and dominant (the property with the benefit of the easement) owners have the right to use, the dominant owner has an obligation to contribute toward its maintenance. “This rule is based upon the principle that, by using the easement, both the dominant and servient estates contribute to its wear and deterioration and, therefore, distribution of the burden of easement maintenance and repair between both estates is equitable and just.” The decision is not a blanket ruling that all holders of access easements over private roads have an obligation to contribute toward the road’s maintenance, but it may be a step in that direction.
On April 10, 2015, Paul Alfano spoke before the New Hampshire Land Surveyors Association on the subject of how to convert a private road into a public highway.