What Is Equalization Factor?
An equalization factor is a multiplier applied to local assessed values so that every county is assessed at the same share of market value. Illinois, for example, sets a county "multiplier" each year to bring average assessments to its one-third-of-market-value standard, so overlapping taxing districts are taxed fairly.
Equalization Factor in plain English
Counties do not all assess property at the same share of market value. An equalization factor corrects for that: the state compares assessments with sale prices and multiplies each county's assessed values so they all sit at the standard level.
In Illinois the factor is called the multiplier and is set each year so assessments average one-third of market value. Pennsylvania takes a different approach, publishing a common level ratio used mainly in assessment appeals.
Formula
Equalized Assessed Value = Assessed Value × Equalization Factor- Assessed Value
- The value the local assessor placed on the property.
- Equalization Factor
- The state-set multiplier for the county; above 1 when local assessments are below the standard level.
Exemptions are generally subtracted after equalization; the tax rate is then applied to the result.
Worked example
Applying a county equalization factor (Illinois-style)
Illustrative example - round numbers, not current market data. Calculated with Reaixo's calculator engines.
Assumptions
- Local assessed value
- $100,000
- State standard
- Assessed value = one-third of market value
- County equalization factor (illustrative)
- 1.0300
| Step | Calculation | Result |
|---|---|---|
| 1. What the factor says about local assessments | 33.33% ÷ 1.0300 | 32.36% of market value |
| 2. Equalized assessed value | $100,000 × 1.0300 | $103,000 |
Equalized assessed value: $103,000. A factor above 1 means the county assessed below the one-third standard on average, so every assessment in the county is raised by the same percentage. The tax rate is then applied to the equalized value (after any exemptions).
What this calculation leaves out
- Because every property in the county moves by the same factor, the multiplier does not change any one owner's share of the county's levy.
- Illustrative factor. Each county's factor is set by the Illinois Department of Revenue each year; Pennsylvania uses a different tool, the common level ratio.
Why it matters
It changes the assessed values tax rates are applied to, but because every property in the county moves by the same factor, it does not change any one owner's share of the local levy.
Because every property in the county moves by the same factor, the multiplier does not change any one owner's share of the local levy; total bills depend on what local taxing bodies request.
When Equalization Factor is used
- Understanding why the "equalized assessed value" on an Illinois tax bill differs from the assessment.
- Comparing assessment levels between counties.
- Checking an appeal: in Pennsylvania, dividing an assessment by the county's common level ratio gives the market value the assessment implies.
Common mistakes
- Assuming a higher multiplier means a higher tax bill.
- Applying the tax rate to the assessed value instead of the equalized value.
- Confusing Illinois' multiplier with Pennsylvania's common level ratio, which is used in appeals.
Equalization Factor: frequently asked questions
Does a higher equalization factor raise my taxes?
Not by itself. Illinois explains that a change in the factor does not mean total bills rise or fall, and it does not change any one owner's share of the levy.
Who sets the equalization factor?
A state agency sets it. In Illinois, the Department of Revenue sets a factor for each county every year by comparing three years of sales with assessments.
What is a common level ratio?
It is Pennsylvania's ratio of assessed value to market value for a county, set by the State Tax Equalization Board and used at the appeal level.
More Owning Terms
Recommended next step
Estimate the bill from an equalized value and a local tax rate.
Property tax calculator →Sources and review
- 2024 Lake County Tentative Multiplier Announced (PTAX-352), Illinois Department of Revenue. Supports: Illinois assesses property at one-third of market value; the factor is set yearly per county from three years of sales; above or below 1 depending on the assessment level; it does not change an owner's share of the levy.
- Common Level Ratio (CLR), County of Berks, Pennsylvania, Assessment Office. Supports: Pennsylvania's common level ratio is set by STEB from sales and assessments and used only at the appeal level; assessment ÷ CLR gives the implied market value.
Where this applies: United States. Property assessment and equalization are set by state law and administered by counties and municipalities, so methods and terms vary by state.
Last reviewed: · Updated:
Examples use illustrative figures; rules of thumb are labelled as such. Rates, limits and program rules change - confirm current figures with your lender or a qualified professional.
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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