EQUALIZATION RATES 

The equalization rate seeks to measure the relationship of assessed values to market values. Each year municipalities submit sales data information to the New York State Office of Real Property Services (ORPS) and based upon this data the ORPS sets an equalization rate for each of the state’s more than 1,200 assessing units.  Quite simply an equalization rate is the state’s measure of a municipality’s level of assessment.

Equalization values are used for:

1. Evidence in court proceedings
2. The Establishment of tax and debt limits;
3. The determination of the level of STAR exemptions;
4. The apportionment of sales tax revenues; and
5. Determine state assessments or approval of local assessments.

An equalization rate is the ratio of the assessed value to the market value. This can also be phrased as the assessed value over the total market value. In other words, an equalization rate of 100% indicates that market values and assessed values overall are equal. An equalization rate of 50% means that total assessed value is half of total market values for all properties in the municipality. NOTE:  There would be no need for equalization rates if municipalities assessed at full value.

· A falling equalization value means that property values rising

· A rising equalization value means that property values are declining.

Illustratively, the chart to the right shows the equalization rates for the City of White Plains for the past fifty years. The column farthest to the right illustrates the year-over-year percentage-change in the equalization rate. As per the chart, fifty years ago the assessment on a property in White Plains would have been roughly equal to 73% of its full market value while today, the assessment on the same property should be representative of less than 3% of the full market value.

Note: Many jurisdiction like White Plains do not reassess regularly and thus when one lowers their assessment they may continue to receive the benefits of the lower assessment for a lifetime.

Here lies the problem: According to the equalization-rate tables, property values in White Plains went up by almost 26% in the 2002 calendar year, and they were flat for 2008. But in reality, property values in White Plains were down considerably for 2008, and not up in 2002 nearly as much as the rate indicates. Moreover the one-size fits all considerably for 2008, and not up in 2002 nearly as much as the rate indicates. Moreover the one-size fits all equalization rate is intrinsically favoring one class of property over another since different property classes move at different rates. For instance in the recent boom bust cycle, single family residential properties increased in value first, with commercial properties lagging in appreciation. When the market turned downward single family properties decreased in value first and now commercial properties are slipping as well.

There are years in the cycle when each and every property will be valued incorrectly by significant margins, since the one-size fits all equalization rate is intrinsically ill-suited for a rapidly changing market like the real estate market in the New York metropolitan area. It is these and other assessment and valuation miscalculations — inherent in the NY property tax system — that RPTAG will fight to eliminate for you!

On the sub-pages which follow, we provide equalization rates for all of the jurisdictions where we work, comparing rates from 2007 and 2008 (where reliable data was available from the State).  Please search these sub-pages to find your jurisdiction to see which direction the leaders in your community are purporting that property values are trending.