Explaining Assessed Value
Assessed value is a key factor in determining property taxes and is typically a percentage of a property's fair market value. Local municipalities like cities, counties, and school districts use this value to levy property taxes. Unlike an official appraisal, the assessed value is based on various factors.
Calculating Assessed Value
The tax assessor for your local municipality calculates the assessed value by first determining the fair market value of your home. This involves assessing comparable properties, home attributes, and even personal property inspections in some cases. The municipality then uses a residential assessment ratio and millage rate to determine your property tax amount.
Assessed Value vs. Fair Market Value
Assessed value is calculated by a tax assessor based on assessment percentages, while fair market value is determined by appraisers using property features, market conditions, and comparable properties. Assessed value is used for property tax purposes, while fair market value is utilized in buying or selling processes.
Impact of Assessed Value
The assessed value of your home affects your property tax bill, which may increase over time as your home's value rises. If you disagree with the assessed value, you can dispute it and request a reassessment. Understanding assessed value can help ensure you pay the correct amount in property taxes annually.
