Investor's wiki

Assessed Value

Assessed Value

Assessed value is the dollar value assigned to a home or other piece of real estate for property tax purposes. It considers the value of comparable properties in the area, among different factors. By and large, the assessed value is calculated as a percentage of the fair market value of the property.

Grasping Assessed Value

The assessed value of real estate or other property is just utilized for deciding the applicable property tax, otherwise called a ad valorem tax. A government assessor is responsible for assigning the assessed value and for refreshing it intermittently.

Government assessors are normally designated by determined tax districts, and each district might have various procedures for working out assessed value. Notwithstanding, the fundamental cycle is to a great extent the equivalent.

Assessed value considers the overall quality and condition of the property, neighborhood property values, square film, home elements, and market conditions. A significant number of these decisions depend on modernized real estate data for that area and the encompassing area.

Contingent upon the state and region, assessors might be required to personally visit properties intermittently for assessment purposes. Owners who need to dispute the assessed value placed on their property can request a reassessment, which is a second evaluation of the property.

Assessed value might be lower for a property in the event that you are a owner-occupant rather than a landlord (this is once in a while called a homestead exemption). That doesn't influence the market value of the property yet can reduce your property tax bill.

How Is Assessed Value Determined?

In many states and regions, assessed value is calculated as a percentage of the property's fair market value. That percentage can shift significantly starting with one place then onto the next.

Mississippi, for instance, has quite possibly of the least ratio in the nation for owner-involved single-family homes, at 10%. Massachusetts has one of the highest assessment ratios, at 100%.

How Are Property Taxes Calculated?

The assessed value of your house is just a single factor used to decide your property taxes.

To compute property tax, most assessors utilize an equation like the accompanying, which commonly incorporates a millage rate, or tax rate:

Fair Market Value \u00d7 Assessment Ratio \u00d7 Millage Rate = Effective Property Tax

The millage rate is the tax rate applied to the assessed value of the property. Millage rates are normally communicated per $1,000, with one mill addressing $1 in tax for each $1,000 of assessed value.

Thus, for instance, a house with a fair market value of $300,000 in an area that utilizes a half assessment ratio and a mill rate of 20 mills would have an annual property tax of $3,000 ($300,000 \u00d7 0.50 = $150,000; $150,000 \u00d7 0.02 = $3,000).

Notwithstanding real estate, many states impose a tax on certain personal property, which is likewise generally founded on the property's assessed value. That can incorporate mobile homes, cars, cruisers, and boats. Those rates can change widely also, contingent upon where you live.


  • Assessed value isn't equivalent to fair market value (what the property could sell for) however is much of the time in view of a percentage of it.
  • Assessed value is the dollar value assigned to a home or other piece of real estate for property tax purposes.
  • A few states likewise tax personal property, like cars and boats, and assign an assessed value to those too.
  • It thinks about comparable home sales, location, and different factors.