As part of the Annual Adjustment process, counties are responsible for submitting a ratio study and uniformity for all classes of property in all townships. The ratio study measures the accuracy and equity of assessments. It is determined by the formula: Assessed Value/Sale Price = Ratio. The assessment ratio for all properties in Indiana is to be 100%.
The accuracy of assessments refers to how close the assessments determined by local assessing officials are to market value-in-use.
See County Specific Information for your county’s Ratio Study.
The equity of assessments refers to how uniform assessments are within a class of property or geographic area. It is measured by the Coefficient of Dispersion, or the relative dispersion or variability of assessments from the median. For improved residential property, it should be 0=<15%. For all other classes of property, it should be 0=<20%.
The ratio studies are submitted by the county to the DLGF, which reviews and approves the submitted ratio studies.
- Annual Adjustment process - Annually adjusting property values are part of Indiana's move to a market-based assessment system that began in 2002. Similar market-based assessment systems are currently being used in 48 other states.
The annual adjustments are calculated by comparing the prior year assessment with current sales data from a neighborhood. The difference, positive or negative, will be used to create a factor that assessing officials will apply to the property's assessed value to bring it to current market value.
Under the old system, real estate was generally only reassessed every 10 years, which left taxpayers with a large change in their assessments every decade. Annual adjustments curb that large lump sum change in assessments by annually adjusting values based on sales.
- Assessment - The official act of discovering, listing, and appraising property for ad valorem tax purposes. “Ad valorem” tax refers to any tax imposed on the basis of the monetary value of the taxed item. In Latin, the term literally means “according to value.”
- Accuracy - It is measured by the median or average level of assessment for a class of property. For any class of property in a township, it should fall between 90% and 110%.
- Market Value - The most probable price, estimated in terms of money, which a property would bring in a sale between a willing buyer and seller under arms-length conditions, in an open market with adequate market exposure and reasonable marketing time.
- Equity - Is measured by the coefficient of dispersion (COD). The COD should be 0=< on improved residential property and 0=<20% on all other classes.
- Coefficient of Dispersion - The relative dispersion or variability of assessments from the median. For improved residential property, it should be 0=<15%. For all other classes of property, it should be 0=<20%.
- Price Related Differential (PRD) - Tells whether low-value properties in a class are over- or under- valued in relation to high-value properties.
- Regressivity/Progressivity - The PRD for any class of property in a township should be between .98 and 1.03.
- 2016 Ratio Study Guidance [Assessment] - January 5, 2016
- Updated Location Cost Modifiers for the 2015 Annual Adjustment - November 23, 2015
- Barns and Sheds Cost Table - June 18, 2015
- Assessment of Agricultural Land and Excess Residential Land Legislative Changes - May 13, 2015
- Supplement to 50 IAC 4.2-15-14 Present Value of Personal Property Leases - March 2, 2015
- 2015 Ratio Study Guidance - February 11, 2015
- Updated Location Cost Modifiers for the 2015 Annual Adjustment - February 11, 2015
- 2014 Cost Schedule Errata] - January 14, 2015
- Release of Updated Cost Information for 2015 Annual Adjustment - October 31, 2014
- Updated Location Cost Modifiers for the 2014 Annual Adjustment - February 7, 2014
- 2014 Ratio Study Guidance - January 17, 2014
- 2013 Ratio Study Guidance - January 7, 2013
- Release of Updated Cost Information for 2013 Annual Adjustment - October 31, 2012
- Updated Location Cost Modifiers for 2013 Annual Adjustment - October 31, 2012
- 2012 Ratio Study Guidance - December 2, 2011
- New Requirement for Approval of Annual Budgets or Additional Appropriations - June 8, 2011
- Adjustment of Maximum Tax Rates after Reassessment or Annual Adjustment - May 20, 2011
- 2011 Annual Adjustment Update - Sales Verification - April 28, 2011
- 2011 Ratio Study Review Process / Annual Adjustment Guidance - January 11, 2011
- Adjustment of Maximum Tax Rates after Reassessment or Annual Adjustment - August 31, 2010
- Annual Adjustment Rule - May 7, 2010
- Guidance on Reporting Annual Adjustment Factors - February 9, 2010
- Upcoming Changes to March 1, 2011 (pay-2012) Ratio Study Review Process - January 12, 2010
- 2010 Ratio Study Review Process / Annual Adjustment Guidance - January 11, 2010
- Annual Adjustment Factors Developed by the Department - July 10, 2009
- One Year Delay in General Reassessment Start Date - July 9, 2009
- HEA 1094 - Valuation Date and Assessment Date - July 8, 2009