Measuring Vertical Property Tax Inequity in Multifamily Property Markets

Abstract

Vertical equity in property tax systems refers to the assessment of all properties in a taxing jurisdiction at the same proportion of their market values. This study considers alternative methods for measuring vertical inequity in multi-family property markets using sample data. The results indicate that vertical inequities do exist in this sample, with lower valued properties being assessed at a higher proportion of market value than higher valued properties. This study suggests that owners of properties in lower value ranges in this market should carefully monitor the assessment process to minimize their property tax expense.

Keywords: property tax , multifamily, vertical inequity

JEL Classification: H21, H31, H71, K34, E62, L85