Equalization Ratio (Chapter 123 Ratio)
The ratio of a municipality's average assessed values to average true market values, published annually by the NJ Division of Taxation. Used to equalize tax burdens and determine tax appeal eligibility.
If a municipality has an equalization ratio of 85%, it means assessed values are on average 85% of market values. In a tax appeal, the assessed value is divided by the equalization ratio to derive the "implied market value" which is compared to the appraiser's opinion of market value. A homeowner can appeal if the implied market value exceeds the true market value by more than 15% (the "common level range"). The equalization ratio is also used for county-level tax equalization to ensure fair distribution of school and county taxes across municipalities with different assessment levels.
Related Terms
Assessed Value
The value assigned to a property by the local tax assessor for property tax purposes.
NJ Property Tax Appeal
The legal process by which a NJ property owner challenges their property's assessed value at the County Board of Taxation or NJ Tax Court.
Market Value
The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus..
More in NJ-Specific
View allNJ Board of Real Estate Appraisers
The state regulatory body under the NJ Division of Consumer Affairs that licenses, regulates, and disciplines real estate appraisers in New Jersey.
NJ Appraiser Licensing Tiers
New Jersey's four credential levels for real estate appraisers: Licensed Trainee, Licensed Residential, Certified Residential, and Certified General.
NJ Continuing Education Requirements
CENew Jersey requires licensed and certified appraisers to complete continuing education hours every two-year renewal cycle, including a mandatory USPAP update course and NJ-specific law module..
Supervisory Appraiser
A Certified Residential or Certified General appraiser who supervises a Licensed Trainee appraiser, providing mentorship, training, and oversight.