Assessed value is a measure of how much a property is worth for tax purposes. Your county or local government sends an assessor to determine that value (along with location-specific variables like school district and mill rate) and uses it to calculate your annual tax bill.
Here's the key thing to understand upfront: assessed value is not the same as what your home is worth on the open market, and it's not what a bank's appraiser would say it's worth either. All three numbers serve different purposes, and knowing how they relate can save you from overpaying in taxes or misreading a property listing.
Property taxes are the single largest source of state and local tax revenue in the United States, accounting for 28.9% of total state and local tax collections in fiscal year 2023.[1] That means the assessed value of your home directly affects one of your largest annual expenses as a homeowner.
Does your home's assessed value seem wrong?
If the assessed value of your home is much lower than you think it's worth, don't panic. Assessed value is often lower than market value by design, and it won't affect your home's listing price or any applications for a mortgage refinance or home equity line of credit.
If the assessed value seems higher than expected, that's worth a closer look. We'll cover how to dispute it in the section on lowering your property taxes.
How assessed value is determined
(assessment rate ÷ 100) × market value = assessed value
Assessed value is calculated by multiplying your home's fair market value by the local assessment rate — the percentage of your home's value that is subject to taxation.
Assessment rates vary significantly by state and county. Across the country, they range from as low as 10% to as high as 100% of a property's market value.[2] That wide range explains why two homes with identical market values — but in different jurisdictions — can have dramatically different tax bills.
For example, a home with a $400,000 market value in a jurisdiction with a 70% assessment rate has an assessed value of $280,000. The same home across the county line, where the assessment rate is 100%, has an assessed value of $400,000.
How to look up your home's assessed value
You don't need to wait for a tax bill to find your assessed value. Most counties post assessment records in public online databases. Here's how to find yours:
- Search "[Your County] property assessor" or "[Your County] tax records." Most county assessor websites have a property lookup tool where you can search by street address.
- Check your most recent property tax bill. Your assessed value is listed there, usually labeled "assessed value" or "taxable value."
- Look it up on your county's tax payment portal. The same site where you'd pay your bill typically shows your current assessment.
Assessment records are public record in every U.S. state, which means you can also look up the assessed values of neighboring properties. That's useful context if you're considering an appeal.
Market value vs. assessed value
Market value is determined by current conditions: what buyers are willing to pay, how many homes are for sale, and how your home compares to others that have recently sold nearby. It reflects the real world right now.
Assessed value often lags behind. Depending on your jurisdiction, assessments may happen every one to five years, and in the interim, your assessed value may not reflect recent price swings in your market.
Other factors that affect market value but may not be reflected in your assessment include:
- Condition and curb appeal
- Square footage and number of rooms
- Recent renovations or additions
- Age of the home
- Energy efficiency upgrades
- Hyper-local neighborhood demand
Because of these gaps, don't use a property's assessed value to benchmark what it should sell for. Sellers set listing prices based on comparable sales — not tax records.
Methods assessors use to estimate market value
Most jurisdictions use one or more of three standard approaches to arrive at a market value for your property before applying the assessment rate:
- Sales evaluation: Comparing recent sales of similar homes nearby, adjusted for differences in size, condition, or improvements
- Replacement cost: Estimating what it would cost to rebuild the structure from scratch, accounting for depreciation on older homes
- Income value: Calculating what the property would be worth as a rental, minus maintenance and operating costs — used more often for multi-family or investment properties
Appraised value vs. assessed value
An appraisal and an assessment sound similar, but they serve completely different purposes.
| Appraised value | Assessed value | |
|---|---|---|
| Purpose | Estimate market value for lending or insurance | Determine property tax liability |
| Who does it | Licensed, independent appraiser | Government assessor |
| Ordered by | Lender, insurance company, seller, or homeowner | Local tax authority |
| Inspection | Typically includes interior inspection | Often remote, using public data |
| How often | Per transaction or request | Every 1–5 years (varies by jurisdiction) |
Appraisals are typically required by mortgage lenders before a loan can be approved. The cost averages $358 for a single-family home, with most falling between $314 and $423.[3] If you're using a government-backed loan (FHA, VA, or USDA), expect to pay more for the appraisal fee. That's because these loan programs require additional documentation and the appraisers must meet stricter federal standards.
Assessors, on the other hand, usually don't enter your home. They rely on public records, and in states that require frequent mass reassessments, they may be evaluating thousands of properties at once using automated valuation models.
When are properties assessed?
Most counties reassess property values every one to five years, though some states mandate annual reassessments. For example, Arizona, Georgia, and Michigan require property to be reassessed every year.[4][5][6]
Other states leave the timing to local tax authorities.
In addition to scheduled cycles, a reassessment can be triggered by:
- A sale or change of ownership
- A mortgage refinance
- Filed permits for home improvements or additions
Effective property tax rates vary significantly by state. Illinois has the highest effective rate at $17.93 per $1,000 of home value, while Hawaii has the lowest at $3.08 per $1,000 (although Hawaii's high home values mean homeowners there still pay substantial dollar amounts in taxes).[7]
Tax limitation laws
Many jurisdictions cap how much your assessed value can increase in a given year. This protection is designed to keep homeowners from being priced out of their own property during rapid appreciation cycles. Here are some examples:
- Arkansas: Homestead properties can't be assessed at more than 5% above the prior year's value.[8]
- Maryland: Homestead properties can't increase more than 10%, and local governments can set an even lower cap.[9]
- Michigan: Assessed value for a homestead can't increase more than 5% or the rate of inflation, whichever is less.[10]
To find out whether your state or county has a cap and what the limit is, search "[Your state] homestead assessment cap" or check your county assessor's website directly.
What buyers need to know about assessed value and taxes
When you're comparing homes, two properties can have the same assessed value but dramatically different tax bills depending on where they are. Tax bills are the product of both assessed value and the local tax rate. You have to look at both numbers.
Here's what shapes your actual tax bill:
- Assessment rate: What percentage of market value is taxed (10–100% depending on the jurisdiction)[2]
- Mill rate: The tax rate applied to assessed value; one mill equals $1 of tax per $1,000 of assessed value
- Exemptions: Programs like homestead exemptions reduce your taxable assessed value if the home is your primary residence
Many tax jurisdictions don't automatically apply exemptions. If you move into a home that qualifies as your primary residence, you typically need to apply with your county assessor's office within a set window after closing.
How property tax bills are calculated
assessed value × property tax rate = property taxes
Tax rates are expressed in mills. One mill equals $1 of tax per $1,000 in assessed value. To calculate your bill, multiply your assessed value by the total mill rate across all taxing authorities: your county, city or municipality, and school district.
Example
Say you're buying a home with a $450,000 market value in a jurisdiction with an 80% assessment rate and a combined mill rate of 40:
- Assessed value: $450,000 × 0.80 = $360,000
- Annual tax bill: $360,000 × (40 ÷ 1,000) = $14,400 per year / $1,200 per month
That $1,200/month is added to your mortgage payment via escrow, so understanding this before you make an offer matters for your monthly budget.
To check the mill rate for a home you're considering, Google "[County Name] property tax mill rate" or visit the county assessor's website directly. Most jurisdictions publish this information publicly.
Sample mill rate breakdown
| Taxing authority | Mill rate |
|---|---|
| School district | 10 |
| County | 15 |
| Municipality | 15 |
| Total | 40 mills |
Your school district, county, and municipality each levy their own taxes based on how much revenue they need to fund their operations. Those individual mill rates are added together to produce the total rate applied to your assessed value.
Property tax calculator
How to find your local tax rate
Search "[County Name] property tax assessor" or "[County Name] mill rate" to find your county's tax assessor website. Most publish the current mill rate for the county, school district, and municipality in a single document or table. You can also call the assessor's office directly — the number is usually listed on your most recent tax bill.
How to lower your property taxes
Step 1: Look up your assessed value and verify the facts
Before filing any appeal, pull your property record from the county assessor's website and check for errors. Common mistakes include:
- Wrong square footage
- Incorrect number of bedrooms or bathrooms
- Property classified as commercial rather than residential
- Improvements not yet completed listed as finished
If you find a factual error, contact the assessor's office directly. Many corrections can be made without a formal appeal.
Step 2: Compare your assessment to your neighbors'
Because assessment records are public, you can look up the assessed values of similar homes on your block. If comparable homes (similar size, age, and condition) are assessed significantly lower than yours, that's your strongest argument for a reduction.
Step 3: Request a formal reassessment
In most jurisdictions, you have 30–45 days from the date you receive your assessment notice to file a formal appeal. Deadlines vary by state and county, so check with your local assessor's office as soon as you receive your notice. Don't wait. This window is short, and missing it typically means you must wait until the next assessment cycle.
To file, contact your local tax authority (usually the county assessor's office or a local board of equalization) and submit your evidence. Helpful evidence includes:
- Recent comparable sales of similar homes in your neighborhood (focus on sales close in date to your assessment date)
- Photos documenting condition issues not reflected in the assessment
- A comparative market analysis from a local real estate agent (often free)
- An independent appraisal, if the amount in dispute justifies the cost ($358 on average)[3]
The appeal process is more accessible than most homeowners assume. Despite success rates between 40% and 60% in some jurisdictions, only about 5% of homeowners ever file an appeal, even though the majority of those who do succeed in getting at least a partial reduction.[11]
Step 4: Escalate if needed
If you disagree with the outcome of a formal reassessment, most states allow you to escalate to an independent board of review, a court of common pleas, or tax court. At that stage, hiring a property tax attorney or consultant is worth considering, particularly if the annual savings would justify the cost. Most tax consultants working on residential appeals work on contingency, meaning no upfront fee and no charge unless they win.
