Assessed Value
Definition of "Assessed value"
The term assessed value is used to define the dollar value of a property for the applicable taxes. The evaluator, a tax assessor, determines the property’s assessed value for tax purposes through real estate valuation. Once the evaluation is done, the assessed value is used to establish the property’s tax and is taxed accordingly.
The assessed value can be differentiated from the property’s appraised value, tending to be lower than this. The difference between the two can be anywhere from 10% to 100%.
What is the Assessed Value?
Calculating the taxes that apply to any particular property, also known as the ad valorem tax, the assessor must determine the assessed value. As the ad valorem tax is applied annually, the assessed value is calculated every year, unlike the appraised value that can also be appraised every five years.
The local government designates the tax assessor by tax districts as each region calculates the assessed value differently. The calculation’s basic standards are more or less the same, but because different districts’ market value varies, tax assessors are designated by regions. To determine an accurate assessed value of a property, the tax assessor takes sales of comparable homes and home inspections into account. Other factors on which the valuation is based are the property’s quality, the value of the property, home features, location, square footage, and market conditions.
How is the Assessed Value used for Property Taxes?
As mentioned above, assessors calculate the assessed value annually as this real estate valuation is the basis for determining the annual property tax that the owner has to pay. Based on the factors specified before, the assessor determines the assessed value as a percentage of the property’s fair market value. All these calculations are computerized, and information about real estate obtained from the neighborhood and surrounding areas plays a crucial role in determining an accurate valuation.
For owners that also inhabit the property, the assessed value can decrease over time (also known as a homestead exemption). This decline is unrelated to the property’s fair market value and does not affect it. However, it does affect the property tax by diminishing it.
Popular Real Estate Terms
Property owned and held jointly and equally shared by each spouse. It is purchased during their marriage, regardless of the wage-earning situation of either spouse. A spouse may not make a ...
Unable to sell an investment to obtain cash in the short-term without incurring A significant loss. Real Estate is typically not liquid because of the inability to sell property to raise ...
Blockbusting is a despicable and illegal racist business practice. Here’s how Blockbusting happens: a real estate agent, or someone posing as one, comes to a homeowner and instills ...
Ability of a large group of retail stores or shopping center to take business away from other smaller or more distant shopping stores. ...
A real estate professional’s job is to represent their seller’s or buyer’s best interest in a real estate transaction through an agency relationship. This means that the ...
Court order to seize and sell property because of the nonpayment of taxes, or foreclosure of property. ...
Money set aside for a possible loss, such as from a fire. ...
Portion of a construction loan withheld by a lender from a contractor until all construction work is satisfactorily completed or sufficient space is rented in a floor loan. The holdback ...
An actual location’s elevation defines the height or space below or above an established reference point. We call this point geoid, a math model of our planet’s sea level. ...
Have a question or comment?
We're here to help.