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
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The ...
Right of a party, the assignor, to allocate the benefits of certain insurance policies to a third party, the assignee. Insurance on real estate may assign the policy to protect the property ...
Landlord's right to receive the value of the tenant's property to pay for unpaid rents or for damages to the leased premises. ...
In real estate and across the nation, you will see different types of house structures, frames, and aspects. One of those is the A-frame type. This is an architectural style that leans ...
One-time charge assessed by a bank or other financial institution at the closing of buying real property. The fee increases the effective cost to the borrower. One discount point translates ...
Charges resulting in involuntary encumbrances against real property derived from legislated law rather than from debts owed to organizations o r individuals. For example, of a homeowner ...
Insurance affording protection against losses due to damage to or destruction of property or contents therein. Insurance protects assets and any future income thereon from loss, such as a ...
Analysis of a real estate sales data to appraise real estate values. Sources of real estate sales data used in the market data approach include the official records of deeds and leases ...
Absence of a personal liability such as when a creditor may seize an office building used as security for the obligation but cannot attach any other assets of the debtor. ...
Have a question or comment?
We're here to help.