Lifestyle
Assessed Value Explained
Discover what assessed value means for your property taxes. Learn the difference between assessed value, market value, and its impact on homeowners.
What is it?
Assessed value is the dollar amount assigned to a property by a municipal government for the specific purpose of calculating property taxes. This figure is determined by a public tax assessor and is often different from the property's fair market value—the price it would sell for on the open market. The calculation method varies by jurisdiction but is typically based on a percentage of the property's appraised value. For example, if a home's market value is $500,000 and the local assessment rate is 80%, its assessed value would be $400,000. This is the number your local property tax rate will be applied to.
Why is it trending?
With fluctuating real estate markets and rising living costs, homeowners are paying closer attention to their property tax bills. As municipalities update their property assessments to reflect current market conditions, many people see a significant jump in their home's assessed value. This trend prompts homeowners to learn more about the assessment process, understand their rights, and explore options for appealing an assessment they believe is unfairly high. Online property data and a greater focus on personal finance have made this information more accessible than ever.
How does it affect people?
The primary impact of assessed value is on a homeowner's wallet. Your annual property tax bill is calculated by multiplying the assessed value of your home by the local tax rate (millage rate). A higher assessed value directly leads to a higher tax bill, increasing the overall cost of homeownership. Understanding your assessment is crucial for budgeting and financial planning. It also empowers homeowners to identify potential errors and file an appeal, which, if successful, can result in significant tax savings.