If the subject property ratio exceeds the upper limit of the common level range, how is assessment determined?

When the subject property ratio exceeds the upper limit of the common level range, assessment is determined by the process of multiplying the average ratio times the true value. This method is designed to ensure that properties are assessed equitably, especially when there are significant fluctuations in property values within a municipality.

Using the average ratio allows for a standardized approach, reflecting current market conditions without being overly influenced by outlier properties that may have inflated assessments. This method is particularly important in New Jersey, where the Division of Taxation establishes common level ranges to promote fairness in property taxation.

By employing the average ratio, assessors can help maintain consistency across assessments, ensuring that property owners are taxed in accordance with the overall market, rather than on an inflated or deflated individual assessment that falls outside the typical range. This creates a more just environment for property taxation and supports fiscal stability for municipalities.