What is the primary focus of the Price Related Differential (PRD)?

The primary focus of the Price Related Differential (PRD) is to measure equity in property assessments. The PRD is utilized to assess the level of equity among properties within a specific area or jurisdiction. By comparing the assessed values of properties relative to their sale prices, the PRD can indicate whether properties of different values are being assessed fairly.

A PRD value greater than 1.0 suggests that higher-valued properties are under-assessed compared to lower-valued properties, indicating potential inequity in tax assessments. A value less than 1.0 suggests the opposite, where lower-valued properties may be over-assessed. Therefore, the PRD serves as a useful tool in identifying disparities in property assessments, ultimately aiding in ensuring a fairer and more equitable taxation process.

Understanding the importance of equity in property assessments is crucial, as it impacts taxation fairness and the overall effectiveness of the property tax system.