A home’s assessed value and its market value can seem similar, in reality these two values are often quite different and have different uses.

What Is Assessed Value?

Assessed value is a value for a property that is determined by an entity, such as a local municipality, a county, or other governmental agency that is determining the value for the purpose of calculating property taxes.

The assessed value is usually based on factors like:

  • What are similar properties selling for?
  • Recent improvements made to the property being assessed.
  • Income derived from the property such as from renting out a room.
  • Current replacement cost of the property in the event of a disaster

The assessed value of the property is arrived at by the assessor. Any property tax exemptions that the owner may be eligible for are factored in and then the value is multiplied by the multipliers used by that municipality to arrive at the assessed value for the purpose of determining the applicable property taxes.

Typically, the assessed value is some percentage of the property’s fair market value.


Assessments can be tied to the political process in a municipality. The assessment formula can be revised to raise or lower valuations to meet a political agenda such as the need to increase or decrease property taxes.

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