Methodology & Data Sources

PropGap is a rule-based calculation engine. There is no machine learning model producing the gap estimate — every number is derived from a statutory formula applied to verified comparable sale data. The steps are the same for every property:

1. 1

   Retrieve comparable sales

   PropGap queries two sources for recent residential sales. For NJ, it first attempts the RentCast API, then falls back to our proprietary database seeded directly from NJ Division of Taxation SR1A deed transfer records — real arm’s-length transactions updated monthly. For TX, RentCast covers major markets. All comps are filtered for verified sale dates within 2 years.

2. 2

   Calculate the statutory fair assessed value

   The median comparable sale price is run through the state-specific statutory formula (NJ Chapter 123 or TX §41.43) to produce a fair assessed value. This is the number the county board would use if they applied the same methodology.

3. 3

   Compare to the client’s assessed value

   If the client’s actual assessed value exceeds the statutory upper bound, PropGap reports a gap. The annual tax gap = (excess assessment) × (local tax rate). If the assessed value falls within the statutory range, PropGap reports “within fair range” — no gap.

New Jersey uses a Common Level Range (CLR) system under N.J.S.A. 54:3-22 (Chapter 123). Each year, the NJ Division of Taxation certifies an equalization ratio for every municipality — the ratio of assessed values to true market values for that town. The CLR is a band around that ratio: lower bound at 85% of the ratio, upper bound at 115%.

A property owner has statutory grounds for a mandatory reduction only if their assessment falls above the CLR upper bound. Being above fair value but within the CLR is not sufficient grounds under Chapter 123.

medianCompMV    = median sale price of comparable properties
equalizationRatio = 2025 certified ratio for the municipality (from NJ Division of Taxation)

fairAV    = medianCompMV × equalizationRatio
clrLower  = fairAV × 0.85
clrUpper  = fairAV × 1.15

GAP EXISTS if: clientAssessedValue > clrUpper
taxGap    = (clientAssessedValue − clrUpper) × localTaxRate

PropGap uses the 2025 certified equalization ratios downloaded directly from NJ Division of Taxation county PDFs. Ratios are stored per-municipality — not averaged across counties. Towns that have undergone a recent revaluation typically carry ratios near or above 1.00 (reflecting assessments at or near current market value); non-reval towns may carry ratios of 0.60–0.90.

What PropGap reports for NJ: When a gap is found, the Evidence Kit shows the equalization ratio applied, the computed fairAV, the CLR upper bound, and the client’s assessed value relative to those benchmarks. Page 3 of the Evidence Kit reproduces this formula verbatim so it can be cited directly in a county board submission.

Texas uses a market value standard under Texas Tax Code §41.43. A property owner can protest on two grounds: (1) value is above market value, or (2) value is unequal compared to similar properties. PropGap uses the equity/unequal appraisal standard, which requires that a property’s appraised value not exceed the median appraised value of a reasonable number of comparable properties.

medianCompMV    = median sale price of comparable properties in the same market area
stateRate       = ~2.0% (varies by county — verify against client's tax bill)

fairAV         = medianCompMV  (TX appraises at 100% of market value)
GAP EXISTS if: clientAppraisedValue > medianCompMV
taxGap         = (clientAppraisedValue − medianCompMV) × stateRate

Unlike NJ, Texas does not apply an equalization ratio — properties are appraised at 100% of estimated market value. The gap is straightforward: if the client’s appraised value exceeds the median comparable market value, the client is over-appraised relative to their market peers.

Texas protest deadlines are May 15 or 30 days from the date of the Notice of Appraised Value, whichever is later. PropGap surfaces the applicable deadline in the Evidence Kit header.

PropGap uses a dual-source approach for comparable sales — prioritizing real government deed transfer records for NJ, with RentCast as a supplemental source for property details and TX coverage.

NJ Primary Source — NJ Division of Taxation SR1A

Supplemental Source — RentCast

Why two sources? RentCast’s NJ comp data sometimes lacks recent sale dates — a known limitation of aggregated commercial datasets. The NJ DoT SR1A file is the authoritative source: every deed filed in the state, recorded the day of transfer. Using it directly means PropGap’s NJ comps are the same records a county board appraiser would cite.

PropGap assigns a confidence tier to every result based on the number and quality of comparable sales found. This is a professional judgment call built into the algorithm — not a marketing label.

Comp matching criteria: same municipality (NJ) or ZIP code (TX), same property type (residential), bed count within ±1, square footage within ±30%, sold within 24 months. PropGap does not apply dollar-per-square-foot adjustments — the median is used directly, consistent with how NJ county boards evaluate equity evidence.

This page is the due diligence artifact for any firm evaluating PropGap for professional use. If your firm has questions about methodology not addressed here, contact info@propgap.ai.