Real estate tax assessed value: what it means and how it's calculated

Last updated 2026-07-09

What is assessed value in real estate?

Assessed value is the number your county or municipal assessor puts on your property to calculate how much property tax you owe each year. It's not the price your home would sell for. It's not your lender's appraisal. It's a government-assigned figure, set by a local official following state law, and it feeds straight into the formula that produces your tax bill.

The math is simple: Assessed Value × Tax Rate (mill rate) = Annual Property Tax. A home assessed at $300,000 in a place with a 1.2% effective rate owes $3,600 a year. Every dollar the assessor adds to your assessed value costs you real money.

Most states set assessed value as a percentage of what the assessor thinks the property would sell for on the open market. That percentage is the assessment ratio (also called the level of assessment). In California, assessed value for most homeowners is capped at the purchase price plus a maximum 2% annual increase under Proposition 13 ^[1], so long-term owners are frequently assessed far below current market value. In Cook County, Illinois, residential property is assessed at 10% of market value ^[2]. In Texas, assessed value is supposed to equal 100% of market value, though the state comptroller audits whether counties actually hit that mark ^[3].

The rules vary enormously by state, and sometimes by property class (residential versus commercial versus agricultural). You have to know your state's ratio before you can judge whether your assessment is fair.

How does assessed value differ from market value and appraised value?

These three terms get mixed up constantly, and confusing them leads to bad decisions. Here's the clean version.

Market value is what a buyer would pay and a seller would accept in an arm's-length deal on a given date. It's an estimate, always. Appraisers, Zillow, and your county assessor all try to measure the same underlying thing, using different methods, different data, and different levels of care.

Appraised value is a formal estimate of market value prepared by a licensed appraiser, usually for a mortgage lender. An appraisal follows the Uniform Standards of Professional Appraisal Practice (USPAP) and is tied to a specific date. If you hired an appraiser yesterday, that's your appraised value.

Assessed value comes from the assessor's office, typically using mass appraisal software that runs statistical models across thousands of properties at once. The assessor almost never sets foot in your home. The model pulls recent comparable sales, property characteristics from public records (square footage, bedroom count, lot size, year built), and sometimes a physical inspection that may be years old. Mass appraisal is fast and cheap. It also makes mistakes at the individual-property level, which is exactly where you live.

The link between assessed and market value is the assessment ratio. Here's how it shakes out in a few big states:

State	Typical assessment ratio	Notes
California	Purchase price + ≤2%/yr	Prop 13 cap; ratio vs. current market varies widely [1]
Texas	100% of market value	Comptroller audits accuracy [3]
Illinois (Cook County, residential)	10% of market value	Then multiplied by state equalizer [2]
New York (outside NYC)	Varies by municipality	Can be as low as a few percent in some towns [4]
Florida	100% of market value (Just Value)	Homestead Save Our Homes cap: max 3%/yr increase [5]
Georgia	40% of fair market value	State constitutional requirement [6]

If the assessor's market value estimate is wrong, your assessed value is wrong. That's the number worth fighting.

How do assessors actually calculate your property's assessed value?

Assessors use three standard approaches borrowed from real estate appraisal, run at mass scale. For most homeowners, only one of them matters.

The sales comparison approach is the workhorse for residential property. The assessor's software finds recent sales of comparable homes (comps) and adjusts for differences in size, age, condition, and features. If three similar homes nearby sold for $400,000, $415,000, and $390,000, the model puts your home's market value somewhere in that range, then applies the state ratio.

The cost approach estimates what it would cost to rebuild the structure today, subtracts depreciation, and adds land value. Assessors reach for it on new construction or odd properties with no good comps. Where construction costs run high, this approach can overstate value, especially for older homes with functional obsolescence (awkward layouts, outdated systems).

The income approach is almost entirely for income-producing property: apartments, retail, office, industrial. The assessor estimates what a buyer would pay based on the income the property throws off. If you own a small rental, this one touches you.

For single-family homeowners, the sales comparison approach drives the number. And the model is only as good as three things: the sales data it uses, the accuracy of your property's recorded characteristics, and the comps it selects. All three go wrong. A finished basement the assessor thinks is unfinished, a bathroom count that's one too high, a batch of comps from a nicer submarket than yours. Each is legitimate grounds for an appeal.

Reassessment cycles vary by jurisdiction. Some counties reassess every year (most Texas counties reappraise annually ^[3]). Some do it every three to five years. When the market cools after a hot streak and your county is on a long cycle, you can sit assessed above current market value for years. That's money out of your pocket every quarter.

What is the assessment ratio and why does it matter for your tax bill?

The assessment ratio is the fraction of market value the assessor is supposed to use. It matters for two reasons: it sets your taxable base, and it's the main test of whether your assessment is fair compared to your neighbors'.

Under a 100% ratio, assessed value should equal market value. A home worth $400,000 should be assessed at $400,000. Under a 40% ratio (like Georgia ^[6]), a $400,000 home should be assessed at $160,000.

Here's the part people miss. Your assessment can look low in raw dollars and still be unfair relative to your street. Say your home is worth $400,000, your county targets a 100% ratio, but your assessed value is $430,000. That's a $30,000 over-assessment. In a place with a 1.5% effective rate, it costs you $450 a year in extra tax. You have grounds to appeal even though the nominal number doesn't jump out at you.

Many states publish official assessment ratio studies. The International Association of Assessing Officers (IAAO) recommends the median ratio land between 90% and 110% of market value, with a coefficient of dispersion (a measure of assessment uniformity) below 15% for residential property ^[7]. When your county's ratio study shows a median of 95% but your property sits at 115% of market, you have statistical proof of inequity, more than a high number.

Pair a ratio study with your own comparable sales analysis and you have real appeal ammunition. Most state assessment divisions publish these studies annually. Look on your state's Department of Revenue or Department of Taxation website.

How does assessed value affect your property tax bill?

Your bill comes from three moving parts: assessed value, exemptions, and the tax rate. The assessor controls exactly one of them.

The formula: (Assessed Value minus Exemptions) × Mill Rate = Tax Bill.

A mill is one-thousandth of a dollar. A mill rate of 20 means $20 in tax per $1,000 of taxable assessed value. A property assessed at $300,000 with a $50,000 homestead exemption has a taxable value of $250,000. At 20 mills, the bill is $5,000.

Mill rates get set by local governments (city, county, school district, special districts), independent of the assessor. The assessor doesn't set your tax rate. That's a separate government body entirely. What the assessor controls is the base that rate gets applied to. This is why fighting your assessment works even when you can't touch the rate.

Two things follow for you. First, even a small assessment cut saves money every year until the next reassessment. A $20,000 reduction in a 1.5% effective-rate jurisdiction saves $300 a year. Over a five-year cycle, that's $1,500. Second, exemptions cut your taxable value directly. A $50,000 homestead exemption in a 1.5% jurisdiction saves $750 a year. If you qualify for one and haven't claimed it, that's the easiest money in all of property taxes.

Can your assessed value be higher than your home's actual market value?

Yes, and it happens more than most people realize. A 2021 study by the Lincoln Institute of Land Policy found that low-value properties in many U.S. cities are assessed at effective rates two to three times higher than high-value properties, a pattern called regressive assessment ^[8]. Translation: if you own a modest home, you're statistically more likely to be over-assessed as a share of market value than your wealthier neighbor.

The causes are predictable. Mass appraisal models struggle at the low end because sales there are less frequent and condition varies more. Assessors lean on square footage and bedroom counts, but a $150,000 home in rough shape looks identical in the data to a $200,000 home in move-in condition when nobody has updated the condition fields.

Another common one: a market correction. If your county reassessed in 2022 at peak prices and hasn't touched it since, your assessed value may now sit above what you'd actually clear if you sold.

When your assessed value tops what you think you could sell for, that's the starting case for an appeal. You need evidence: a recent appraisal, recent comparable sales, or both. The appeal process exists for exactly this situation, and most jurisdictions let homeowners file without a lawyer or a contingency-fee consultant.

What exemptions can reduce your assessed value or taxable value?

Exemptions usually don't cut assessed value directly. More often they cut the taxable value (assessed value minus the exempt amount) that the tax rate hits. The effect on your bill is the same, but knowing the mechanism keeps you from getting confused at a hearing.

Homestead exemptions are the most common. Most states offer them to owner-occupants who file by a deadline. Florida's general homestead exemption removes up to $50,000 from taxable value on a primary residence and caps annual increases at 3% under Save Our Homes ^[5]. Texas gives homestead properties $100,000 off taxable value for school district taxes as of 2023 ^[3]. Georgia offers a $2,000 exemption from state and county taxes, with additional exemptions that vary by county ^[6].

Senior exemptions run separate from homestead exemptions in most states and can be much larger. Illinois has a Senior Citizens Assessment Freeze Homestead Exemption that freezes assessed value at its base-year level for qualifying seniors ^[2]. Some counties stack several exemptions on top of each other.

Other common ones: disability exemptions, veteran and surviving-spouse exemptions, and agricultural-use exemptions (often called greenbelt exemptions). Religious and nonprofit property is typically exempt outright.

Every exemption has an application deadline, and it's not the tax bill due date. It's usually a spring date tied to the assessment calendar, often falling between January 1 and April 1 depending on the state. Miss it and you wait a full year in most places. Check your county assessor's website for the exact date.

One trap for new buyers. If you just bought a home and the previous owner had a senior or disability exemption, that exemption almost certainly does not transfer to you. Your assessed value can jump hard after purchase because those caps fall off. That's not an error you can appeal. Budget for it.

How do you find out what your assessed value is?

Your county mails a notice of assessment (sometimes called a notice of proposed property taxes, a valuation notice, or an assessment notice, depending on the state) once a year, usually in spring or early summer before the new tax year. That document shows your assessed value, last year's value, and often a deadline to appeal. Read it the day it arrives.

You can also look it up anytime. Almost every county assessor runs an online property search portal where you punch in your address and pull current assessed value, the property characteristics on file, exemptions, and sometimes prior-year history. It's public record.

If your county has no online portal (rare, but it still happens in rural areas), visit the assessor's office or call and ask.

Once you have the number, ask two questions. Is the assessor's estimated market value close to what your home would actually sell for? And are the recorded characteristics correct (square footage, bedroom and bathroom counts, lot size, year built)? Errors in the characteristics data are surprisingly common and often fixable through an informal review, before you ever file a formal appeal.

In major metros, knowing your specific portal helps. Maricopa County in Arizona, Cook County in Illinois, Los Angeles County in California, and San Diego County all run public search tools where assessed value updates after each reassessment cycle. The local guides linked at the bottom of this article point you to the right one.

How do you appeal your assessed value if it's too high?

Appealing an assessed value is a formal administrative process, but it isn't complicated. The steps look about the same in most states.

Step one: get your assessment notice and write down the appeal deadline. Missing the deadline is the single most common reason appeals fail. Deadlines range from 30 days after the notice is mailed to 90 days or more depending on the state. Some states use a fixed calendar date. Others run from the notice date. Write it down the day the notice shows up.

Step two: gather evidence. You're proving one of two things: the assessor's market value estimate is too high, or your property is assessed at a higher ratio than comparable properties (an equity argument). For the market value case, recent sales of genuinely comparable homes are the core. A licensed appraisal is the strongest single piece of evidence, and it runs $300 to $600 typically. Comparable sales you pull from public records or a real estate site cost nothing and are often enough at the informal level.

Step three: request an informal review first. Most counties offer an informal meeting or phone call with an assessor's staffer before you file a formal appeal. Bring your comp data. A lot of assessments get cut right here, without ever reaching a board hearing.

Step four: if the informal review goes nowhere, file a formal appeal with your county's Board of Review, Assessment Appeals Board, or Appraisal Review Board (the name varies by state). File before the deadline with your evidence attached.

Step five: attend the hearing and present your case. The burden is on you to show the assessed value is wrong. You don't have to prove the exact right value. You only have to show the assessor's number isn't supported by the evidence.

You do not need a lawyer or a contingency-fee firm for a residential appeal. Contingency firms typically keep 25 to 50% of your first year's tax savings. Do the work yourself and you keep all of it. TaxFightBack's appeal kit walks you through the comparable sales analysis and the hearing prep without taking a cut of your savings.

See the county-specific appeal guides for Cook County, Los Angeles County, Maricopa County, and San Diego County for local deadlines and filing instructions.

What happens after a successful appeal, and can your assessed value go back up?

Win your appeal and the county adjusts your assessed value down, recalculates your tax bill, and in most states issues a refund or credit for any tax already paid at the higher rate.

The reduction usually holds for the current tax year. In many jurisdictions it also sets a new base for the next reassessment cycle, though the assessor is free to reassess higher when that cycle comes around. A successful appeal does not permanently cap your value.

In Texas, if you file a formal protest and settle or win, the assessor is limited from raising your assessed value by more than 5% the following year in most circumstances under the appraisal cap rules, though market value can still climb ^[3]. California's Prop 13 caps annual increases at 2% regardless of market movement until the property changes ownership ^[1]. Other states have no cap, so a successful appeal just resets the clock.

For counties on multi-year reassessment cycles (common in Georgia, Illinois, and parts of the Northeast), a reduced value can hold for three to five years before the next mass appraisal. That compounds the payoff.

One risk to know. A few states let the assessor counter-appeal (argue the value should be even higher) if you file. This is rare for residential property, and most state boards limit it, but check your state's rules before you file. In practice, assessor offices are understaffed and counter-appeals on homes are very uncommon.

How does assessed value work differently across states?

The variation is wide enough to change your whole strategy. Here's how six big systems actually operate.

California uses acquisition-value assessment under Prop 13 ^[1]. Your assessed value freezes at the purchase price and rises no more than 2% a year until you sell. Long-term owners in hot markets pay tax on a base that may be a fraction of current market value. New buyers pay on what they just paid. Big disparities between neighbors, but predictable bills for owners.

Texas has no income tax and leans hard on property taxes. The state constitution requires 100% market value assessment ^[3]. Homestead and other exemptions cut the taxable value, but the assessed value target is full market. Appraisal districts reassess annually, and the comptroller publishes a ratio study every year to check whether counties are hitting the 100% target.

Illinois, specifically Cook County, is the odd one. Residential property gets assessed at 10% of market value by the county assessor, then the state applies an equalization factor (the "multiplier") that pushes the assessed value toward a 33.33% of market target before exemptions ^[2]. The multiplier changes each year. Your bill runs on the equalized assessed value (EAV) after exemptions.

New York is a patchwork by municipality. Towns set their own assessment ratios and reassessment schedules. Some upstate towns haven't done a full reassessment in decades and run at ratios well below 100%. The state publishes equalization rates annually so you can compare across municipalities ^[4].

Florida assesses at 100% of just value (market value), but the Save Our Homes cap limits annual increases in assessed value for homestead properties to 3% or the CPI change, whichever is less ^[5].

Georgia requires assessment at 40% of fair market value under the state constitution ^[6]. County boards of equalization hear appeals, and most counties reassess annually.

For Georgia readers, county-level guides for Gwinnett County, Bibb County, Cherokee County, Coweta County, and Madison County cover local procedures and deadlines.

What data and records should you pull before challenging your assessed value?

You need two things: your property's own record and the market evidence. Get both before you say a word to the assessor.

For your property, pull the assessor's property record card. It's a public document, available at the assessor's office or online. It lists every characteristic the model used: living-area square footage, bedroom and bathroom counts, garage size, basement finish level, lot size, year built, and recent permits. Read every field. Compare it to your actual home. A single wrong entry (a half-bath counted as a full bath, a finished basement listed as unfinished, or the reverse) can move the assessed value on its own.

For market evidence, you want sales of comparable homes from roughly the last six to twelve months (closer to the assessor's valuation date is better), within a half-mile to one-mile radius, with similar size, age, and condition. Three to five strong comps are enough. Your county recorder's records are the best source. Zillow and Redfin show sale prices too, but verify them against the recorder's data before you rely on them.

Be honest about what's actually similar. An assessor at a hearing will pick apart every difference between your comps and your home. Choose properties whose differences support a lower value for you (comparable homes that sold for less), and be ready to explain why they're close enough to count.

Find three sold comps averaging $350,000 while your assessed value implies a $400,000 market value, and you've got a $50,000 over-assessment and a clean case. Write it up simply: address, sale price, sale date, a one-line note on similarity. That summary is your core filing.

For Texas homeowners in Bexar County, see the Bexar County tax assessor guide. For Illinois's Lake County, see the Lake County property tax guide. Missouri residents with questions about the personal property side of the system can check the St. Louis County personal property tax guide.

Frequently asked questions

What is assessed value in real estate, in plain terms?

Assessed value is the dollar figure your local government assigns to your property to calculate your annual property tax bill. It's set by the county or municipal assessor using sales data and property records, not by the market or a mortgage lender. Multiply assessed value (minus any exemptions) by your local tax rate and you get what you owe each year.

Is assessed value the same as market value?

No. Market value is what your home would sell for. Assessed value is a government-assigned number that may be a fraction of market value depending on your state's assessment ratio. In Georgia the ratio is 40%, in Cook County Illinois it's 10% before equalization. In Texas and Florida the target is 100%, but exemptions and caps still separate the two numbers.

How often does assessed value change?

It depends on your state and county. Some jurisdictions reassess every year (most Texas counties, most Georgia counties). Others use multi-year cycles: three years in some Illinois counties, five or more in parts of New York. California's Prop 13 limits annual increases to 2% regardless of market movement. Check your county assessor's website for the local schedule.

Can my assessed value be higher than what my home would actually sell for?

Yes, and a 2021 Lincoln Institute of Land Policy study found it happens disproportionately on lower-value properties. If market values have fallen since your last reassessment, or if the assessor's model used the wrong characteristics, your assessed value can exceed market value. That's the primary basis for a tax appeal.

How do I find my property's assessed value?

The easiest way is your county assessor's online property search tool, which is public record in every state. You can also find it on your annual assessment notice (mailed each spring in most states) or your tax bill. If your county has no online portal, call or visit the assessor's office. The data is free and you have a legal right to it.

What is an assessment ratio and how do I find mine?

The assessment ratio is the percentage of market value your assessor is supposed to apply. Georgia is 40%, Cook County Illinois is 10% (before equalization), Texas is 100%. Find your state's ratio in statute or on your Department of Revenue website. Your state may also publish an annual ratio study showing the actual median ratio achieved countywide, which is useful evidence in an appeal.

How much can my assessed value increase in one year?

It depends entirely on state law. California caps increases at 2% per year under Prop 13. Florida's Save Our Homes cap limits homestead property increases to 3% or CPI, whichever is lower. Texas has no statutory cap on assessed value increases but has a 10% cap on appraised value increases for homestead properties per tax year. Most other states have no cap.

Do exemptions lower assessed value or just the tax bill?

Most exemptions reduce your taxable value, not the assessed value itself. Assessed value stays the same; the exempt amount is subtracted before the tax rate is applied. Texas's $100,000 homestead exemption for school taxes and Florida's $50,000 homestead exemption both work this way. A few states freeze assessed value directly for qualifying seniors, which is different.

What is the deadline to appeal an assessed value?

Deadlines vary sharply by state. In Georgia, most counties require a formal appeal within 45 days of the assessment notice. Texas appraisal district protest deadlines are May 15 or 30 days after the notice, whichever is later. Illinois county board of review filing windows vary by county but are typically 30 days from the township's open session. Miss the deadline and you forfeit your right to appeal for that year.

Can I appeal my assessed value without a lawyer?

Yes, and most homeowners do it themselves. The informal review and board hearing processes at the county level are built for unrepresented owners. You need evidence: comparable sales and your property record card. A licensed appraisal ($300 to $600) strengthens your case but isn't required at the informal stage. Contingency firms keep 25 to 50% of your first-year savings; doing it yourself means you keep all of it.

What evidence do I need to appeal an assessed value?

Two types: market evidence and property data. For market evidence, pull three to five recent sales of comparable homes (similar size, age, condition, within a half-mile to one mile) that sold for less than the assessor's implied market value. For property data, review your property record card for errors in square footage, bedroom and bathroom counts, or basement finish level. Record card errors are often the easiest wins.

What happens to my assessed value after a successful appeal?

The county reduces the assessed value for the current tax year and adjusts your bill, issuing a refund or credit if you've already paid at the higher rate. The reduced value typically holds until the next reassessment cycle. In Texas, a post-protest settlement restricts the increase in the following year. In California, Prop 13 applies regardless of appeal outcomes. A successful appeal does not permanently cap your value in most states.

Is assessed value used for anything other than property taxes?

Occasionally. Some states use assessed value as a reference in transfer tax calculations or certain municipal fee schedules. But its main and practically exclusive job is property tax calculation. It does not affect your mortgage, your homeowner's insurance premium, or your sale price. Lenders use appraised value; insurers use replacement cost value.

Why is my assessed value much lower than what I paid for my home?

This is common and usually fine for you. In California, Prop 13 assessments often run far below current market for long-term owners. In Florida, the Save Our Homes cap creates a similar effect. In other states, a multi-year reassessment cycle may just mean the county hasn't caught up to recent price increases. A below-market assessment is generally good news: your tax bill is lower than it would be if the assessor reassessed today.

Sources

1. California State Board of Equalization, Proposition 13 Overview: Under Prop 13, assessed value is set at purchase price and increases no more than 2% per year until ownership changes.
2. Cook County Assessor's Office, How Property Is Assessed: Residential property in Cook County is assessed at 10% of market value; the state applies an equalization multiplier to reach a 33.33% target.
3. Texas Comptroller of Public Accounts, Property Tax: Texas requires 100% market value assessment; the state comptroller audits each appraisal district annually; homestead exemption is $100,000 off school district taxable value (as of 2023).
4. New York State Department of Taxation and Finance, Property Tax and Assessment: New York municipalities set their own assessment ratios; the state publishes equalization rates annually to allow valid comparisons across municipalities.
5. Florida Department of Revenue, Property Tax Oversight: Florida assesses at 100% just value; Save Our Homes caps annual increases in homestead assessed value at 3% or CPI, whichever is less; the general homestead exemption is up to $50,000.
6. Georgia Department of Revenue, Property Tax: Georgia requires assessment at 40% of fair market value; the standard homestead exemption is $2,000 from state and county taxes, with additional county exemptions.
7. International Association of Assessing Officers (IAAO), Standard on Ratio Studies: IAAO recommends a median assessment ratio between 90% and 110% of market value and a coefficient of dispersion below 15% for residential property.
8. Lincoln Institute of Land Policy, Regressivity and the Causes of Assessment Inequity (2021): A 2021 Lincoln Institute study found low-value properties in many U.S. cities are assessed at effective rates two to three times higher than high-value properties.
9. Maricopa County Assessor, How Property Is Valued: Maricopa County uses mass appraisal updated annually and provides a public online property search with assessed values.
10. Bexar County Appraisal District: Bexar County appraises annually at 100% of market value per Texas law; protest deadline is May 15 or 30 days after notice.
11. Cook County, IL Board of Review, Filing Deadlines: Cook County Board of Review appeal windows are set by township and published annually; the formal filing period is typically 30 days.