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
The definition of low-income housing is any house that is either rented or owned by an individual or family that has a monthly household income that does not exceed a certain percentage of ...
Way of valuing real estate that computes the discounted present value of an expected stream of income, including rental income and future capital gains or losses. ...
Also called straight bankruptcy. A provision of the 1978 bankruptcy Reform Act providing for a persons property to be divided among creditors to satisfy his/her unpaid debts. Any debtor ...
Estimated market price property could bring using currently accepted appraisal methods. This might not be the same as the market price at any one given time when the seller is compelled to ...
To depreciate is to lose value for something. Depreciation is the act of losing worth.Connecting with real estate, Property depreciation can be both an accounting method typically used to ...
Final property appraisal estimate arrived at by applying appropriate appraisal methods. ...
Tax deduction permitted upon the transfer of property from one spouse to another. The deduction is allowed under the federal gift tax for lifetime transfers or under the federal estate tax ...
The bonus depreciation definition refers to a tax incentive that allows a business to accelerate the depreciation deduction in the year when the asset is purchased and placed into use. The ...
Effect on the market price of houses as interest rate change. For example, when mortgage interest rates rise, the prices of houses tend to fall. ...
Have a question or comment?
We're here to help.