Property Valuation
Vermont's equalization ratio in property taxation is used to:
AEqualize property tax bills between municipalities
BEnsure that assessed values across towns bear a consistent relationship to fair market value for state aid calculations✓ Correct
CEqualize education spending between rich and poor towns
DDetermine the state income tax rate
Explanation
Vermont uses the Common Level of Appraisal (CLA) to equalize assessed values across municipalities. Towns where assessments are below or above fair market value are adjusted via the equalization ratio for education tax purposes.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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