What is the acceptable range for the price-related differential (PRD)?

The price-related differential (PRD) is a measure used in property assessment to evaluate the equity of assessments across different properties. An acceptable PRD indicates fairness and consistency in property valuation.

The correct range for PRD is typically considered to be between .98 and 1.03. This range suggests that assessments are neither systematically high nor low compared to market values, thereby indicating a level of equity among properties. A PRD below .98 can indicate that lower-value properties are assessed at a higher rate than higher-value properties, while a PRD above 1.03 can signal the opposite, suggesting that higher-value properties are favored in terms of low assessment rates.

Understanding this range is crucial for assessors and administrators aiming to maintain equitable tax assessments and avoid potential issues of inequity that may lead to reassessments or appeals.