Tax Assessment Formula

Tax Assessment Formula

Determining a “fair” assessment can be complex.  Each year a state agency called the State Tax Equalization Board issues a common level ratio for each county, essentially the average difference between assessments and sales prices for properties that sold in the county in the preceding year. 

The CLR multiplied by current fair market value is supposed to yield a “fair” assessment.  The current CLR for Lancaster County is 1.00, meaning that owners of a home with a fair market value of $200,000 should be assessed at $200,000.

Alternatively, a figure called the common level ratio factor, the mathematical reciprocal of the common level ratio, can be used.  That figure for Lancaster County is also currently 1.00, meaning that multiplying the assessed value of a property by 1.00 should yield a fair market value. 

If the market value – as “proven” by an appraisal or comparable sales – is less than the assessed value, say experts, an appeal may be in order.

The reason the CLR and common level ratio factor are currently 1.00 is because Lancaster just underwent a county-wide reassessment in 2018.  The CLR will change from year to year.  As an example, if the CLR for 2020 is set at 0.91 that would mean owners of a home with a fair market value of $200,000 should be assessed at $182,000.  The common level ratio factor under those circumstances would be 1.10.  So, if you multiplied a home with an assessed value of $182,000 by 1.10 you would yield a fair market value of approximately $200,000.

NOTE:  The only time the CLR and the common level ratio factor are both the same is when the CLR is 1.00.  For example, if the CLR was 76.5, the mathematical reciprocal (or common level ratio factor) would be 1.31.