What is an assessment ratio?
An assessment ratio is a property taxation term used to represent the value of a piece of real estate in comparison to the market value of other similar properties within the same area. The assessment ratio is typically expressed as a percentage, and it is calculated by dividing the assessed value of a property by its market value. In South Dakota, the assessment ratio is set by the state Tax Commissioner, and the ratio for real estate is typically between 70% and 100%. Thus, for a property with a market value of $100,000, the assessed value may be between $70,000 and $100,000. The assessment ratio is used to determine the amount of property tax the owner needs to pay. The higher the assessment ratio, the more property tax is paid.
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