Assessed value vs market value on your tax bill: what each number means

Last updated 2026-07-09

What is market value on a property tax bill?

Market value, sometimes labeled "fair market value" or "estimated market value" on your bill, is what a willing buyer would pay a willing seller in an open sale, with neither side under pressure. That is the definition the International Association of Assessing Officers (IAAO) uses in its standard on mass appraisal, and nearly every state statute echoes it.^[1]

The county assessor does not actually sell your house to figure this out. They run a mass appraisal model that compares your home to recent sales of similar properties, adjusts for size, age, condition, and location, and lands on a number. Think of it as an educated estimate, not a certified appraisal. The model is re-run on a schedule that varies by state: annually in some places, every two to four years in others.

Market value is the starting point. Everything else on your bill flows from it.

What is assessed value, and why is it different from market value?

Assessed value is market value multiplied by the assessment ratio set by your state or county. It is the dollar figure the taxing authority actually uses to calculate your bill.

Some states, like California and New Jersey, assess at 100% of market value, so assessed value and market value are the same number on paper (though other limits, like Proposition 13 in California, cap how fast assessed value can rise).^[2] Other states use fractional assessment. Illinois assesses residential property at 33.33% of market value in most counties outside Cook County, so a home worth $300,000 carries an assessed value around $100,000.^[3] Texas has no state income tax and constitutionally caps the taxable value of homesteaded property at 10% growth per year, no matter what the market does.^[4]

The key equation is:

Tax bill = Assessed value × (1 − exemptions) × millage rate

Check every term in that equation. Assessors make mistakes in all three places.

Here is how common assessment ratios look across a sample of states:^[5]

State	Residential assessment ratio	Notes
California	100% (of base year value)	Capped at 2% annual increase under Prop 13
Texas	100%	Annual cap of 10% for homestead properties
Illinois (outside Cook)	33.33%	Cook County residential is 10%
Colorado	6.765% (2023-2024)	Set biennially by the legislature
New York	Varies by locality	Can be as low as 1% in some towns
Georgia	40%	Statewide constitutional requirement
Minnesota	1% on first $500K, 1.25% above	Tiered residential rate

How does your county turn market value into an assessed value?

The assessor uses one of three recognized approaches to estimate market value, then applies the ratio.^[1]

Sales comparison approach. The most common for single-family homes. The assessor pulls sales of comparable homes (comps) from the past six to twelve months, adjusts for differences in square footage, bedroom count, lot size, age, and condition, and averages the adjusted prices. If your neighborhood had ten sales last year and your house is typical, this works reasonably well. If your neighborhood had two sales of wildly different homes, the model gets shaky fast.

Cost approach. Estimates what it would cost to rebuild the structure from scratch, subtracts depreciation, and adds land value. Used most often for newer homes, unique properties, or commercial buildings without many sales comps.

Income approach. Used for income-producing property. The assessor capitalizes the net operating income at a market cap rate. Rental homes, apartments, and commercial buildings get this treatment.

The assessor typically relies on data you filed on an old permit, a property record card, or a third-party data vendor. They almost never walk through your house. So errors in square footage, bedroom count, or basement finish are common, and they compound into real money.^[6]

For large counties with hundreds of thousands of parcels, see how Cook County handles this process at cook county tax assessor tax bill or how LA County does it at la county property tax.

What is the assessment ratio, and how do you find yours?

The assessment ratio (also called the assessment level or assessment percentage) is the legally mandated fraction of market value that becomes your assessed value. A state statute, a state board of equalization, or a constitutional provision sets it, not your local assessor.

To find the exact ratio that applies to your property:

1. Search "[your state] assessment ratio residential" on your state's department of revenue or taxation website. These pages are almost always authoritative and free. 2. Read your notice of assessment. Most notices print both the estimated market value and the assessed value, so you can back-calculate the ratio yourself: assessed value divided by market value. 3. Call the assessor's office. Ask specifically, "What assessment ratio applies to Class 1 residential property in this county?" They are required to tell you.

If the ratio on your notice looks wrong, that matters for your appeal. Many states let you challenge the assessed value directly rather than the underlying market value estimate, especially when the assessor applied a ratio inconsistently across comparable properties.^[6]

How does market value vs assessed value affect your actual tax bill?

Here is the math in full. Say your assessor estimates your home's market value at $400,000. Your state's assessment ratio is 40%. That gives an assessed value of $160,000. The county subtracts any exemptions, say a $25,000 homestead exemption, leaving a taxable value of $135,000. The local millage rate is 20 mills ($20 per $1,000 of taxable value). Your bill: $135,000 × 0.020 = $2,700.

Now say the assessor inflated the market value estimate to $450,000. The assessed value becomes $180,000, taxable value $155,000, and your bill jumps to $3,100. That $50,000 market value error cost you $400 a year, every year, until you fix it.

A high market value estimate is more than ink on paper. It is cash leaving your pocket on a recurring basis. The error does not self-correct. You have to act.

For how taxable value flows in a high-tax metro, nyc property tax walks through New York City's class-based system, where residential and commercial properties are taxed at different fractions of market value.

Can your assessed value exceed your market value?

Yes, and it happens more often than most homeowners realize. The common scenarios:

Market decline after the assessment date. If the assessor valued your home in January and prices in your area fell 15% by the time you get the notice in April, the assessed value now sits above actual market value. States with annual reassessment catch this faster. States that reassess every three or four years can leave owners over-assessed for years.

Data errors on the property record card. Wrong above-ground square footage, a basement counted twice, a remodel that got permitted but never finished. Each inflates the model's output. The assessor has no idea unless you tell them.

Unequal assessment. Your house is assessed at a higher ratio of market value than a comparable neighbor's. Most states have a legal doctrine called "equalization" or "uniformity" that bans this, and it is a live appeal ground even when the assessor's absolute market value estimate is reasonable.^[6]

The Lincoln Institute of Land Policy has documented that lower-value properties get assessed at higher ratios than higher-value properties in many jurisdictions, a pattern called assessment regressivity.^[7] If your home is modest in value, the odds of being over-assessed are statistically higher than for your wealthier neighbors.

What is appraised value, and is it the same as assessed value?

No. They are different things, and mixing them up is one of the most common mistakes homeowners make when preparing an appeal.

An appraised value comes from a licensed or certified real estate appraiser who physically inspects your property and writes a report under USPAP (Uniform Standards of Professional Appraisal Practice). Lenders require one before approving a mortgage.

Assessed value comes from the government's mass appraisal model. Nobody walked through your house. No licensed appraiser signed off on it. It is an administrative estimate, not a professional appraisal.

When you appeal, you can submit an independent appraisal as evidence that the assessor's market value estimate is wrong. An appraisal done within six months of the assessment date, using sales data from around that date, is among the strongest evidence you can bring. It usually costs $350 to $600 for a residential property, though fees vary a lot by market.^[8]

For homeowners preparing a DIY appeal in Gwinnett County, Georgia (40% assessment ratio, annual reassessment), the process is spelled out at gwinnett county tax assessor.

Why does your tax bill show both numbers?

Most modern property tax notices print the estimated market value, the assessment ratio or assessed value, any exemptions applied, and the resulting taxable value before showing the rate and final dollar amount. This transparency requirement came from the IAAO and got adopted in most states over the past two decades.^[1]

You see both numbers for one reason: accountability. You are supposed to be able to check the assessor's math at each step and know exactly which number to challenge if something looks off.

If your notice shows only one number, read the fine print or call the assessor's office. Ask: "Is the value shown the full market value estimate, or the assessed value after applying the ratio?" The answer changes how you read the whole bill.

Some notices also show an "equalized value" or a "state equalized value (SEV)," a ratio-adjusted figure the state uses to hand out aid and set debt limits across jurisdictions. Michigan's SEV, for example, is set at 50% of market value by the state constitution.^[9] The SEV is not necessarily the same as your taxable value after exemptions.

How do you know if your assessed value or market value is wrong?

Start with the property record card, the assessor's internal data file on your specific parcel. You are entitled to it in every state. Download it from the assessor's website or request it by email. Look for:

• Square footage. Compare it to your listing from when you bought, your floor plan, or a tape measure. Errors of 100 to 300 square feet are common and can inflate value by $20,000 or more depending on the market.
• Bedroom and bathroom count.
• Basement finish percentage.
• Year built and effective age.
• Any improvements the assessor thinks you made but you did not.

Next, pull the comps. Go to Zillow, Redfin, or your county's public sales database and find three to five homes that sold within the last year, similar to yours in size, age, location, and condition. If those comps say your home is worth $340,000 and the assessor pegged it at $410,000, you have a strong evidence base for an appeal.

For a county-level look at reading the record card and pulling comps, the montgomery county property tax guide walks through it for a Maryland jurisdiction with annual reassessment.

Want to run the full appeal yourself without handing 30 to 40% of your savings to a contingency firm? TaxFightBack's DIY appeal kit walks you through every document, from the evidence package to the hearing itself.

The IAAO reports that nationally, roughly 30 to 40% of properties are over-assessed at any given time, though that figure swings hard by jurisdiction.^[1] You do not need a professional to spot the error. You need the data.

What is the deadline to challenge your assessed value?

Miss the deadline and you are locked in for the year. This is the single most consequential date in the process, and it varies widely by state and sometimes by county.

A few anchor points. Texas requires you to file a protest by May 15 or 30 days after the notice date, whichever is later.^[4] California's general assessment appeal deadline is November 30 for the regular roll.^[2] New York City's deadline for Class 1 properties (1-3 family homes) is March 15 for the tax year starting July 1. Cook County, Illinois, sets a 30-day window from the date your township's assessment roll opens.^[3]

The notice mailed to you states the deadline for your specific parcel. Do not lean on general state rules; they carry exceptions by property class, assessment type, and locality. If you never got a notice, your deadline may still be running. Many states require you to appeal even when the notice was never delivered.

State	Typical appeal deadline	Notes
Texas	May 15 (or 30 days from notice)	Texas Tax Code § 41.44
California	Nov 30 (regular roll)	Rev & Tax Code § 1603
New York City	Mar 15 (Class 1)	NYC Tax Commission
Illinois (Cook)	30 days from township opening	PTAX-230 form
Georgia	45 days from notice date	O.C.G.A. § 48-5-311
Florida	25 days from TRIM notice	Fla. Stat. § 194.011

For San Antonio area homeowners, bexar county tax assessor covers the specific Texas deadline flow. For the Twin Cities, hennepin county property tax covers Minnesota's April 30 appeal deadline.

Does a lower assessed value always mean a lower tax bill?

Usually yes, not always. Tax rates can rise to offset lower assessed values, especially in places that run under levy caps rather than rate caps. If the county needs to raise $500 million in property tax revenue and assessed values across the whole tax base fall, the millage rate goes up to collect the same dollars.

This is a levy-driven system, and it is common at the school district level. Your individual bill still falls if your assessed value drops while the rest of the tax base holds steady. But if everyone in the county successfully appeals at once, the rate could compensate.

For most individual homeowners, a well-documented reduction in assessed value does lower the annual bill and keeps it lower until the next reassessment. The savings compound over years.

One more wrinkle. Some states, like California under Proposition 13, run a base year assessment system. Your assessed value can rise only 2% per year from your purchase price until you sell or make a substantial improvement.^[2] There, market value on your notice is shown for information only, and in a rising market your assessed value sits far below current market. That is the system working as intended. Your issue would be a base year value set wrong when you bought, or an improperly triggered reassessment event.

For California's system, santa clara property tax breaks down how Proposition 13 limits interact with appeal rights in one of the state's highest-value counties.

What evidence do you need to challenge an assessed value?

The strongest package for a residential appeal has three layers.

Layer 1: Property record card errors. If the assessor has your square footage, condition, or features wrong, document the error with photos and measurements. This is the easiest win because it is a factual correction, not an opinion of value.

Layer 2: Sales comps. Find three to six comparable sales from the six to twelve months before the assessment date. They should match yours in size (within 20%), age (within 15 years), condition, and location (within one mile or the same subdivision). Pull them from the county's public sales database or a free real estate portal. Show them in a simple grid: address, sale date, sale price, square footage, price per square foot.

Layer 3: Independent appraisal. For higher-value properties or complex cases, a licensed appraisal kills the subjectivity argument. It usually costs $350 to $600 and can pay for itself many times over if the over-assessment is large.^[8]

You present this evidence at an informal hearing with the assessor's office (many counties offer this before a formal board hearing) or at a formal appeal before the county's Board of Equalization, Assessment Appeals Board, or equivalent body. The burden of proof usually falls on you, the owner, to show the assessor's value is wrong, though some states require the assessor to justify the value once you make a prima facie showing.

For the complete DIY process including templates, TaxFightBack's appeal kit has all the forms and a step-by-step evidence guide. You keep every dollar of savings.

Frequently asked questions

What does estimated market value mean on my property tax statement?

Estimated market value is the assessor's opinion of what your home would sell for in an open market sale between an unrelated buyer and seller with no unusual pressure on either side. It is the foundation of your tax bill. If this number runs too high, your assessed value and your bill run too high. You challenge it by submitting comparable recent sales as evidence during the appeal window.

Is assessed value always lower than market value?

In states with fractional assessment ratios, yes by design. Illinois assesses residential property at 33.33% of market value, so assessed value lands at roughly one-third of the market estimate. In states that assess at 100% of market value, like New Jersey, the two numbers should match. California's Proposition 13 creates a base year system where assessed value often sits far below current market value in appreciating markets.

Can I appeal assessed value even if I think the market value estimate is fair?

Yes. Many states let you argue your property was assessed at a higher ratio of market value than comparable properties, a legal theory called unequal appraisal or lack of uniformity. Texas allows this under Texas Tax Code § 41.43. You do not have to prove the assessor's market value is wrong; you only show comparable properties are taxed at a lower effective ratio. This can be a strong angle even in a hot market.

How often does the assessor update market value?

It depends entirely on your state and county. California generally reassesses only on sale or new construction under Proposition 13. Texas and most other states reassess annually. Michigan reassesses annually but caps taxable value growth at 5% or CPI. Some rural counties in the South reassess every three to five years. Your notice should state the assessment date; if it does not, call the assessor's office and ask.

What is taxable value, and how is it different from assessed value?

Taxable value is what your tax rate is actually applied to after subtracting exemptions from the assessed value. A $200,000 assessed value minus a $25,000 homestead exemption leaves $175,000 taxable value. Some states, like Michigan, also cap taxable value growth independently of assessed value, so the two diverge in rising markets. Your tax bill shows taxable value, not assessed value, as the final base for the rate calculation.

What is equalized value on a tax notice?

Equalized value is a ratio-adjusted figure some states calculate to make property values comparable across jurisdictions for distributing state aid and setting borrowing limits. Michigan's State Equalized Value (SEV) is set at 50% of market value by the state constitution. It is not the same as taxable value after exemptions, and it is not the number you use to compute your bill. Look for the taxable value line for the actual number driving your payment.

Does a recent home sale reset my assessed value automatically?

In most states, yes, a sale triggers a reassessment, but the timing and method vary. California automatically reassesses to the purchase price on sale under Proposition 13. Texas reassesses annually regardless of sales. Some states, like Michigan, use a sales study to calibrate the mass appraisal model rather than reassessing individual parcels on sale. In any state, if you bought your home for less than the current assessed value, that sale price is strong appeal evidence.

Can I use a Zillow or Redfin estimate to challenge my assessed value?

No, and do not try. Automated valuation models like the Zestimate are not admissible evidence in most assessment appeal proceedings. Boards of equalization routinely reject them. What you need are actual closed sales of comparable properties, ideally from your county's public sales database or MLS. You pull the sale data yourself and present it in a comp grid. Sold prices are the evidence; online estimates are not.

How do I find my property's assessment ratio?

Check your state's department of revenue website, searching your state name plus 'assessment ratio residential.' You can also back-calculate it from your notice: divide the assessed value by the estimated market value. A $120,000 assessed value on a $300,000 market value estimate is a 40% ratio, which matches Georgia's constitutional requirement. If the ratio looks off, call the assessor's office and ask which class and ratio applies to your parcel.

What happens if I miss the appeal deadline for assessed value?

In most states, you lose the right to challenge that year's assessment entirely. There is no automatic extension. Some states allow a late filing for good cause (typically illness, military deployment, or a notice that was never delivered), but that requires a formal motion and approval. The safe move is to note the deadline the moment your notice arrives and file even a rough appeal to preserve your rights, then build the evidence before the hearing.

Does a lower assessed value affect my home's sale price?

A lower assessed value does not directly lower market value or your sale price. Buyers and their agents look at actual comparable sales, not tax assessments, to decide what a home is worth. But a buyer can see your annual tax bill in listing disclosures, and a lower bill can make your home slightly more attractive than a similarly priced neighbor with a higher bill, a modest but real factor in competitive markets.

How do exemptions interact with assessed value and market value?

Exemptions reduce your taxable value after the assessed value is set. A homestead exemption does not change the assessor's market value estimate or the assessed value; it subtracts a fixed dollar amount or percentage before the tax rate applies. Senior freeze, veteran, and disability exemptions work the same way. If you qualify and have not applied, you are overpaying every year for nothing. Apply through your county assessor's office, usually with a one-time form.

What is the difference between a tax assessment and a mortgage appraisal?

A mortgage appraisal is a licensed, USPAP-compliant professional opinion of value ordered by a lender, based on a physical inspection of your home and a detailed comp analysis. A tax assessment is a mass-appraisal model estimate produced by the government without a physical inspection. Neither automatically controls the other. A recent mortgage appraisal can be submitted as tax appeal evidence, and it carries weight precisely because a licensed professional saw the property.

Sources

1. International Association of Assessing Officers (IAAO), Standard on Mass Appraisal of Real Property: Market value definition used in mass appraisal: willing buyer, willing seller, open market, no undue pressure; IAAO standard adopted broadly by state statutes
2. California State Board of Equalization, Publication 29: California Property Tax – An Overview: California assesses at 100% of base year value; Proposition 13 limits annual increases to 2%; general assessment appeal deadline is November 30 under Revenue and Taxation Code § 1603
3. Illinois Department of Revenue, Property Tax Information: Illinois assesses residential property at 33.33% of fair market value in most counties; Cook County residential assessment level is 10%
4. Texas Comptroller of Public Accounts, Property Tax Code – Texas Tax Code § 41.44: Texas protest deadline is May 15 or 30 days from notice, whichever is later; annual market value reassessment; homestead cap of 10% annual increase on taxable value; unequal appraisal ground under § 41.43
5. Lincoln Institute of Land Policy, Significant Features of the Property Tax (state-by-state assessment ratios): State-by-state residential assessment ratios including Colorado's biennial legislative reset and Minnesota's tiered residential class rate
6. National Taxpayers Union Foundation, Assessment Accuracy and Uniformity Reports: Assessment data errors including square footage and property record card mistakes are common causes of over-assessment; uniformity (equalization) doctrine available as appeal ground in most states
7. Lincoln Institute of Land Policy, Property Tax and Assessment Regressivity Research: Lower-value properties are systematically assessed at higher ratios of market value than higher-value properties across many U.S. jurisdictions (assessment regressivity)
8. Appraisal Institute, Guide Note 12: Scope of Work: Residential appraisal fees typically range from $350 to $600 for standard single-family homes, varying by market and property complexity
9. Michigan Department of Treasury, Property Tax Estimator and Millage Rates: Michigan State Equalized Value (SEV) is set at 50% of market value by constitutional requirement; taxable value growth capped at 5% or CPI annually
10. Florida Department of Revenue, Property Tax Oversight – TRIM Notice and Appeal Rights: Florida property tax appeal deadline is 25 days from mailing of the TRIM (Truth in Millage) notice under Florida Statutes § 194.011