Vertical equity in property tax assessment requires that assessment levels remain consistent over the range of real estate values, with high-value and low-value properties exhibiting the same ratio of assessment to market value.
On a national level, findings of widespread vertical inequity in property tax assessments—with low-priced properties assessed at a higher percentage of market value than high-priced properties—have challenged assessment offices across the US to measure and evaluate the level of vertical equity in assessment rolls.
The Lincoln Institute of Land Policy Vertical Equity App is designed to provide assessment offices with the capacity to undertake this statistical study and the ability to communicate the results effectively. It allows assessors to easily analyze vertical equity using six different approaches:
- assessment to sale ratio (ASR);
- coefficient of dispersion (COD);
- price related differential (PRD), the price related bias (PRB);
- Spearman’s rank order correlation; and
- Gini measures.
Graphic displays and an overall summary allow these results to be shared and communicated more easily than would be possible with computational data alone.