Equalization Rates & Residential Assessment Ratios

CALCULATING FULL MARKET VALUE and ASSESSED VALUE

The City assesses all real property at a percentage of market value.

The percentage is known as an Equalization Rate (ER) for commercial property and multifamily residences (4+ families and apartment buildings). 

The percentage for residential properties (owner occupied one to three family dwellings) is known as the Residential Assessment Ratio (RAR). 

These rates are established annually by the NYS Department of Taxation and Finance (see their link to Munipro below). 

The ER and RAR are used to determine a property's full market value.  It should be noted that this is merely a calculation.  It is  not what a property would sell for and should not be used to determine a listing price.   It is used to determine if a property is fairly assessed.

The formulas are:

PROPERTY CLASS:   ASSESSED VALUE  divided by RATE/RATIO equals MARKET VALUE

Residential:  8,600 / 3.97% level of assessment =$ 216,625 full market value.

Commercial: 75,000 / 3.85% (2012 ER) = $ 1,948,052

Inversely, this formula is used to determine the assessment:

PROPERTY CLASS:  MARKET VALUE times RATE/RATIO equals ASSESSED VALUE

Residential:  $229,381 x 3.88% (2013 RAR) = 8,900

Commercial:  $ 1,948,052 x 3.85% (2012 ER) = 125,000

NYS Department of Taxation and Finance performs a statistical analysis each year to adjust the rate and ratio in accordance with real estate market trends.  An increasing rate/ratio results in a lower market value calculation; inversely, a lower rate/ratio results in a higher market value.  This example illustrates this relationship for a single family home with an assessment of 8,900:

YEAR: ASSESSMENT divided by RAR = MARKET VALUE (Effect)

2005:  8,900 / 3.05% = $291,803

2006:  8,900 / 2.55% (decreasing) = $349,020 (increasing)

2007:  8,900 / 2.45% (decreasing) = $363,265 (increasing)

2008:  8,900 / 2.63% (increasing) = $338,403 (declining)

2009:  8,900 / 2.64% (slight increase) = $337,121 (slight decrease)

2010:  8,900 / 3.20% (increasing) = $278,125 (declining)

2011:  8,900 / 3.36% (increasing) = $264,881 (declining)

2012:  8,900 / 3.48% (increasing) = $255,747 (declining)

2013:  8,900 / 3.88% (increasing) = $229,381 (declining)

TAXES

In order to determine taxes, you would need to obtain the current tax rate from the City’s Finance Department and multiply it by the assessment less any exemptions.  Tax rates are usually expressed in rates per thousand.  An example of the calculation of a school tax would be:

ASSESSMENT less EXEMPTION(S) divided by 1000 times TAX RATE = TAXES
Example*:  8,900- 2,970 (STAR) /1000 x 603.943369 (school rate) = $3,581.38

*Not current figures--for illustration purposes ONLY. 

FOR INFORMATION ABOUT TAXES, TAX RATES, TAX BILLS, AND DUE DATES PLEASE CONTACT THE FINANCE DEPARTMENT AT 914-734-4109. 

Related links: