January 29th, 2018 7:11 AM by Jackie A. Graves, President
assessed value is the dollar value assigned to a property to measure applicable
taxes. Assessed valuation determines
the value of a residence for tax purposes and takes comparable home sales and
inspections into consideration. It is the price placed on a home by the
corresponding government municipality to calculate property taxes.
general, the assessed value tends to be lower than the appraisal fair
market value of property.
BREAKING DOWN 'Assessed Value'
assessed value of real estate or personal property is only used for measuring
the applicable property tax, also known as an ad valorem tax. A
government assessor is responsible for assigning the assessed value. Government
assessors are usually designated by specified tax districts. Each tax region
has different procedures for calculating assessed value however the basic
standards are primarily the same.
provide assessed valuations annually, which form the basis for a property
owner's annual property tax. The assessed value is a percentage of the fair
market value and takes into account the overall quality of the
property, property values, square footage, home features and market conditions.
Many of these calculations are computerized, based on real estate data in the
neighborhood and surrounding area.
assessed values are arrived at from real estate data. Assessors may be required
to do onsite assessments, and states have varying requirements for how often
assessors must physically visit real estate properties for assessment. Property
owners who want to dispute the assessed value placed on their property can
request a reassessment,
which is a second evaluation of the value of the property.
most states, final property assessment values are a percentage of the
property’s fair market value. The assessed value ratio for assessed value
varies considerably by state. This assessed value ratio can be anywhere from 10
to 100% of a property’s fair market value. Mississippi has one of the lowest
ratios in the nation at 10%. Massachusetts has one of the highest assessment
ratios at 100%.
To calculate property tax, most states use the following equation which
typically includes a millage rate:
x Assessment Ratio x Millage Rate = Effective Property Tax
The millage rate is the tax rate on the assessed value. Millage rates are
typically expressed per $1,000 with one mill representing $1 in tax for every
states also require a tax on personal property which is also usually derived
from the property’s assessed value. Personal property requiring tax can include
mobile homes, cars, motorcycles, and boats.
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