Assessed Value

Assessed Value refers to a valuation placed on a property by a public tax assessor for purposes of taxation. The assessed value is used to calculate property taxes owed by the property owner.

The process of determining the assessed value varies by jurisdiction, but generally involves an evaluation of recent sales of comparable properties and the income potential of the property (for commercial properties), as well as an inspection of the property itself.

Assessors periodically update these valuations to reflect changes in the market and in the property, but the frequency of updates can vary greatly, from every year to every few decades, depending on local laws and regulations.

It's important to note that the assessed value for tax purposes is not necessarily the same as the fair market value (the price a willing buyer would pay a willing seller) or the appraised value (a professional appraiser's estimate of the property's worth). The assessed value is often a percentage of the fair market value, and this percentage is known as the assessment ratio.

For example, if a home has a fair market value of $300,000 and the local assessment ratio is 80%, then the assessed value would be $240,000. If the local property tax rate is 1%, then the property tax for the year would be $2,400.

If a property owner disagrees with an assessed value, they may be able to appeal the assessment, but the process for doing so varies by jurisdiction. Property owners should also be aware that improvements to the property, like renovations or additions, may increase the assessed value and thus the property taxes.