Table of Contents

Assessed Value: Definition, How It's Calculated, and Example

By

澳洲幸运5官方开奖结果体彩网:Julia Kagan

Updated February 07, 2025

Reviewed by

Doretha Clemon

Fact checked by

Maddy Simpson

Part of the Series

Property Taxes Guide

What Is Assessed Value?

Assessed value is the dollar amount assigned to a home or other piece of real estate for property tax purposes. It takes into account the value of comparable properties in the area, among other factors. In many cases, the assessed value is calculated as a percentage of the fair market value of the property.

Key Takeaways

Assessed value is the dollar value assigned to a home or other property for tax purposes.
It takes into consideration comparable home sales, location, and other factors.
Assessed value is not the same as fair market value (what the property could sell for) but is often calculated as a percentage of it.
Some states also tax personal property, such as cars and boats, and assign an assessed value to those as well.

Understanding Assessed Value

The assessed value of a home or other property is used only to determine the applicable property tax (also known as an 澳洲幸运5官方开奖结果体彩网:ad valorem tax).

Assessed value takes into account the overall quality and condition of the property, local property values, square footage, home features, and market conditions. Many of these factors are derived from real estate data for the property's neighborhood and the surrounding area.

Local Government Assessors

A government assessor is responsible for assigning a property's asse♒ssed value and for updating it periodically.

Government assessors are usually designated by specified tax districts🥀. Each district ma🔥y have a different procedure for calculating assessed value. However, the basic process is largely the same.

Depending on the state and locality, assessors may be required to personally visit properties periodically for assessment purposes. Owners who want to dispute the assessed value placed on their property can request a 澳洲幸运5官方开奖结果体彩网:reassessment, which is a second evaluation of the property.

The assessed value may be lower for a property if you are an 澳洲幸运5官方开奖结果体彩网:owner-occupant as opposed to a landlord (this is sometimes called a 澳洲幸运5官方开奖结果体彩网:homestead exemption). That doesn’t affect theꦏ market value of the property but can reduce your property tax bill.

Fast Fact

The assessed value is considered an accepted dollar value for your home and a reliable indicator of the home's worth.

How Assessed Value Is Calculated

In most states and municipalities, assessed value is calculate𝄹d as a percentage of the property’s fair market value. The percentage rate used can vary considerably from one place to another.

For example, at 10%, Mississippi uses one of the lowest percentage rates in the nation for owner-occupied, single-family homes to establish assessed value. By contrast, Massachusetts uses a very high percentage rate of 100%.

Once theꦛ assessed value is known, property taxes c𝕴an then be determined.

Assessed Value and Property Taxes

The assessed value of your home is only one factor used to calculate your property taxes. Many tax authorities use an equation such as the following, which typically includes a 澳洲幸运5官方开奖结果体彩网:millage rate or tax rate:

Fair Market Value × Assessment Rate × Millage Rate = Effective Property Tax

The millage rate is the tax rate applied to the assessed value of the property. Millage rates are typically expressed per $1,000, with one mill representing $1 in tax for every $1,000 of assessed value. So, for cal♍culation purposes, if♐ the mill rate in your jurisdiction is 20, divide that by 1,000 to get .02. Then apply that figure to the calculation.

Example

Say that a house in your area has a fair market value of $300,000. The area's assessment rate is 50% and the mill rate is 20. Using the formula shown above, the property tax would be $3,000:

$300,000 × 0.50 × 0.02 = $3,000

Personal Property Taxes

In ඣaddition to a real estate tax, many states impose a ꧃tax on certain personal property. Similarly, this tax usually is based on the personal property’s assessed value. Types of personal property that are taxed can include mobile homes, cars, motorcycles, and boats. Rates can vary widely as well, depending on where you live.

What's the Difference Between the Assessed Value and the Appraised Value?

Both values are associated with your home, but your local tax authority determines the assessed value used for property taxes. The appraised value meets 澳洲幸运5官方开奖结果体彩网:mortgage application requirements to verify the home's worth. An industry professional usually handles the appraisal. In addition, homebuyers (or sellers) may seek an appraisal of a property they wish to buy (or sell).

Why Is Assessed Value Important?

It's important to know because it plays a role in how your property tax bill is determined. Plus, if you're looking for a home, knowing the assessed value may give you a bargaining chip if the sale price of a home is set much higher.

How Often Does Assessed Value Change?

That depends on th𝕴e state or jurisdiction where the property is located. Some areas update assessments annually. Others may do so every few years. Check with the tax department of your town for details.

The Bottom Line

Assessed value refers to the value assigned to a property, such as a home, by the local government. It is used by the tax authority to determine the property taxes that a homeowner owes. Often, it's calculated as a percentage of the fair market value of the property.

Article Sources

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