The replacement grant reduces the share that must be financed through the
property tax. If we represent the homeowner‘s tax payment as a share of the revenue
required to fund , similarly to equation (2.4), we see that the exemption also reduces the
individual homeowner's proportionate tax burden. The new individual tax share is the
ratio between the taxable value of the homeowner‘s property after the exemption
relative to the sum of the total taxable value of the property base and the total property
tax exemption , because the replacement grant compensates local
government for the reduction in their tax base due to the property tax exemption.
Equation (2.8) shows this relationship between the homeowner‘s new property tax
payment , and the new tax share.