Alfano Law Office, PLLC

  • ALFANO LAW WEBSITE
Home » Resources and Links » Equalization Ratio

Equalization Ratio

The equalization ratio can be used to determine what percentage of fair market value an assessment should be. The equalization ratio is applied against the assessed value to yield the equalized assessed value, or, equalized assessment. Similarly, the equalization ratio divided into the assessed value yields the equalized assessment.

In theory, the equalized assessment should equal fair market value. If the equalized assessment exceeds fair market value, the property may be a candidate for an abatement.

The New Hampshire Department of Revenue Administration develops multiple equalization ratios applicable to property values; however, generally speaking, the “median ratio” is the preferred method for determining whether a property has been assessed proportionally to other properties in the same municipality.

A private appraisal ordinarily will identify a property’s fair market value without regard to equalization ratios or other municipal assessment adjustments.  To compare apples-to-apples, a taxpayer needs to convert the municipality’s assessed value to fair market value.  Here is the formula, where “AV” means the assessed value, “ER” is the equalization ratio, “EA” is the equalized assessment, and “FMV” means fair market value:

AV/ER  =  EA

For example, using an AV of $2,500,000 and an ER of 102.5%:

$2,500,000/1.025  =  $2,439,024

Using an AV of $2,500,000 and an ER of .97%:

$2,500,000/.97  =  $2,577,320

To convert the equalized assessment (the municipality’s equivalent of fair market value) into assessed value:

(EA)(ER)  = AV

Using the same figures as above:

($2,439,024)(1.025) = $2,500,000

($2,577,320)(.97) = $2,500,000

In a rising real estate market, the ER tends to be less than one.

In a falling market, it tends to be greater than one.

napta

NH Tax Abatement

  • Road Law Guide
  • NH Tax Abatement
    • Grounds for Abatement
    • Municipal Application
    • Owners of Properties Outside New Hampshire
    • Transfer Tax Allocation
    • Recent Laws and Rulings
  • Resources and Links
    • Calendar and Key Dates
    • Equalization Ratio
    • NAPTA

NH Real Estate Law Articles

  • Airbnb
  • Common Neighborly Legal Issues
  • Court Updates
  • Dealing with Neighbors
  • Easements
  • Estate Planning
  • General
  • Historic Designation
  • Legal Documents
  • Legal Terms
  • Legislation
    • Business Law
  • Living Trust
  • New Hampshire Property Tax Alerts
  • Private Road Maintenance
  • Private Roads
  • Property
  • Property Investments
  • Property Rights
  • Property Tax
  • Property Tax Law
  • Quieting Title
  • Real Estate Law
  • Revocable Trust
  • Road Law
  • Tax Abatement
  • Taxes
  • Zoning Boards of Adjustments

Recent Articles

NH Supreme Court Upholds Variance Granted by Housing Authority Board that Reversed a Rejection by Town Zoning Board

The New Hampshire Supreme Court (the “Court”) recently … [Read More...]

What is Probate and How Do I Avoid It?

What is Probate? Probate is the court-supervised legal … [Read More...]

Private Road Maintenance 6-Part Series

Navigating the world of private road maintenance?  We are … [Read More...]

The Landscaping Wall in the Buffer Zone

The Landscaping Wall in the Buffer Zone: A Look at the … [Read More...]

Article Archives

Alfano Law Office, PLLC, 4 Park Street, Concord, NH 03301 USA | Phone: (603) 856-8411
Copyright © 2023 · Alfano Law Office, PLLC. All Rights Reserved · Website design by InterActive Synergy, LLC