Real Estate Terms Glossary
What is Assessed Value?
In real estate, assessed value is the value put on a property for the purposes of taxes. The Government will come up with an assessed value of your home so that you can pay property taxes. Assessed value is not typically accurate.
The way assessed value is calculated is by looking at comparable homes sales (comps), location data, and inspections in your area. It is not a reflection of the current market, thus typically is lower than the fair market vlue of a property.
To calculate property tax, most use the following equation:
Value x Assessment Ratio x Millage Rate = Effective Property Tax
Assessed Value Examples
Examples where you will find assessed value include:
- Example 1. You will see your assessed value on your property tax bill.
- Example 2. You may see your assessed value online through a Government portal.
Here’s Investopedia’s definition of assessed value .