Assessed Value vs Market Value: How Assessments Work and How to Appeal

The notice arrives, the number is nowhere near what the neighbor's house just sold for, and the owner asks one of two questions: why is my assessed value so low, or why did my property taxes go up so much? Both have the same answer: an assessment is a tax number, produced by a different process, for a different purpose and usually for a different date than a market value. For how the market value of a house is worked out from comparable sales, start with the complete home value guide; this article covers the tax side.

Assessed, appraised and market value: three numbers, three questions

Is assessed value the same as appraised value? No, and the tax assessment vs appraisal confusion is the commonest one: an appraisal is a licensed opinion about one house for one date, while an assessment is a statistical estimate for every parcel in the jurisdiction, adjusted by law. Is it a good estimate of what your house is worth? Only where the state assesses at full market value and revalues every year, and even then it is a January 1 snapshot from a model that never saw your kitchen. Buyouts and estates run on market value, which is why the tax roll never enters a divorce buyout calculation.

How assessors set the number: mass appraisal, ratios, caps and cycles

Assessors do not appraise your house. Assessed value is calculated by mass appraisal: models built from sales, cost and income data value every parcel as of the lien date, and ratio studies then compare the roll with actual sale prices for closeness and uniformity. The International Association of Assessing Officers publishes the standards for both steps, the Standard on Mass Appraisal of Real Property and the Standard on Ratio Studies; they are advisory, and each state writes its own law on top¹. Four states show how far those laws diverge.

California: acquisition value, the 2 percent factor, Propositions 8 and 19

Under Article XIII A of the state constitution, added by Proposition 13 in 1978, a property's full cash value is its appraised value when it is purchased, newly constructed or changes ownership; from then on it rises by the lower of the change in the California Consumer Price Index or 2 percent a year, producing the factored base year value on your bill²³. The tax rate is capped at 1 percent of that value plus voter-approved bonded debt³, and the Board of Equalization oversees the 58 county assessors who apply the rules⁴.

Proposition 8, passed in November 1978, is the safety valve: when market value on the January 1 lien date falls below the factored base year value, the assessor enrolls the lower figure, reviews it annually, and once the market recovers may raise it by more than 2 percent a year until it is back at the factored base year value, never above³.

Proposition 19 changed who can carry a low value with them: since April 1, 2021, owners aged 55 or older, severely disabled owners and disaster victims may transfer their base year value to a replacement home, and since February 16, 2021, the parent-child exclusion covers only a family home that becomes the child's principal residence, up to the taxable value plus $1,000,000⁵; the inherited property guide covers what that means for heirs.

Florida, New York and Texas: three other rulebooks

In Florida, a permanent resident's homestead exemption cuts taxable value by as much as $50,000 and qualifies the home for the Save Our Homes assessment limitation, which caps annual growth in assessed value; the accumulated difference can be ported to a new Florida homestead⁶. New York municipalities may assess at 100 percent of market value or at a fraction of it (the assessment ratio, which the state calls the level of assessment), so the state tells owners to divide: assessment ÷ level of assessment = the assessor's estimate of market value, which makes a $180,000 assessment at a 40 percent level a $450,000 opinion⁷. Texas appraisal districts must appraise taxable property at market value as of January 1 and reappraise every parcel at least once every three years⁸; when the appraised value rises above the previous year's, a notice is due by May 1, or April 1 for a residence homestead, and it explains how to protest⁹.

Assessed value vs market value: five reasons they diverge

Five mechanisms keep the two numbers apart, and only the last is an error.

1. Acquisition-value caps. In California the taxable value follows the purchase price, not the market²; two identical houses on one street can sit $600,000 apart because one changed hands in 2009 and the other in 2025.
2. Homestead limitations. Florida's Save Our Homes cap lets a long-time owner's assessed value drift far below market while last year's buyer next door pays on the price⁶.
3. Fractional ratios. A New York town assessing at 40 percent is not undervaluing anyone; the level of assessment does the translation⁷.
4. The lien date. Every assessment describes January 1, or the state's equivalent, not the day you read the notice³.
5. Mass appraisal blind spots. A model learns about the new roof or the failed foundation only when a permit or a sale tells it; the ratio study measures the roll as a whole, not your house¹.

For a buyer, an assessed value at half the asking price is not a bargain signal; it says the seller has owned the home a long time. In California the assessment dies at closing, because the purchase price becomes the new base year value²; in Florida the Save Our Homes benefit belongs to the seller, who can port it⁶. Budget the tax on the price you pay, not on the seller's bill.

Reading your notice: land, improvements, exemptions and the rate

Every notice has the same four moving parts, whatever the state calls them.

Land and improvements. The assessor splits the value between the lot and the buildings; an improvement value that fell while the land value rose means the house was aged by formula, not inspected.

Exemptions. A homestead, senior, veteran or disability exemption is subtracted from the assessed value to give the taxable value; Florida's alone is worth up to $50,000⁶. An exemption that silently expired (after a move, a title change into a trust, or a missed renewal) is the commonest reason a bill jumps without a reassessment.

The rate. Tax equals taxable value times the rate, a millage (dollars per $1,000) or a percentage; compare what owners actually pay as an effective rate, yearly tax divided by home value. The Tax Foundation's 2026 tables, built on 2024 Census survey data, put New Jersey and Illinois at 1.88 percent, Texas at 1.40, New York at 1.30, Florida at 0.78, California at 0.70 and Hawaii at 0.29; counties spread wider, from 0.22 percent in Maui County (Hawaii) up to 1.86 percent in New Jersey's Atlantic County; Los Angeles County's median owner paid $5,675 on a median home value of $834,200, an effective 0.67 percent¹⁰.

Why did my taxes go up? Read the lines in order: a reassessment after your purchase², an expired exemption, a new voter-approved levy³, or the end of a decline-in-value reduction³. The assessor's record is explained in the property records guide; the running costs of ownership, tax included, have their own article.

How to appeal a property tax assessment: deadlines, evidence, informal review, hearing

An appeal argues one thing: the assessed value exceeds the market value on the lien date. It is not the place to argue that taxes are too high.

1. Check the record first. Wrong square footage, an extra bathroom, a garage demolished years ago. A factual error is the quickest win, often fixable without a hearing.
2. Ask for the informal review. In California, request a decline-in-value review when the January 1 market value sits below the factored base year value³; in Texas, the notice offers an informal conference with the appraisal district before the review board hearing⁹; in New York, talk to the assessor before Grievance Day⁷.
3. File inside the window. The property tax appeal deadline is local and annual. Los Angeles County takes regular applications between July 2 and November 30 each year, and supplemental, roll-change and escape appeals within 60 days of the notice¹¹; the $46 fee, in force since October 1, 2021, is non-refundable, with a hardship waiver¹². Texas protests must reach the appraisal review board by May 15, or within 30 days of the notice's mailing if later, on Form 50-132⁹. New York's Grievance Day is typically the fourth Tuesday in May; confirm the date with the assessor⁷.
4. Build the evidence. Closed sales of similar homes from around the lien date, adjusted the way an appraiser would; photographs of anything that lowers value; contractor estimates for repairs; the assessor's record with the errors marked. A screenshot of an online estimate is not evidence, because the board cannot see what it rests on; assembling a comps grid is covered step by step.
5. The hearing. Los Angeles County's Assessment Appeals Board acts in a quasi-judicial capacity to settle valuation disputes between taxpayers and the Assessor¹². In Texas the appraisal review board hears both sides, and an owner who loses can go on to district court, the State Office of Administrative Hearings or binding arbitration⁹. In New York, the next steps are Small Claims Assessment Review, a low-cost option for most homeowners, or a tax certiorari proceeding with an attorney⁷.

This is general information, not legal or tax advice.

A Los Angeles County worked example: assessment against indicated market value

The figures are hypothetical and follow California's rules.

A couple buys a house in Los Angeles County in March 2024 for $1,020,000, which becomes the base year value². With the 2 percent factor applied twice, the factored base year value is $1,040,400 on the January 1, 2025 lien date and $1,061,208 on January 1, 2026³. Their neighborhood softened in 2025: three closed sales from October to December, adjusted for size, lot and condition, indicate $960,000 to $990,000, and the couple settles on an indicated market value of $975,000 as of January 1, 2026.

Because the market value is below the factored base year value, Proposition 8 requires the assessor to enroll $975,000 for that lien date³. The appeal file is short: the application, a one-page grid of the three sales with the adjustments, photos of the deferred maintenance the comps did not share, and a printout of the assessor's record.

Where a CheckValue report fits in the appeal file

A CheckValue report is an AI valuation with numbered official sources, and for an assessment appeal it works as the first draft of the evidence. Three parts do the work. The point value with its range is a current market value, the figure the notice has to be measured against. The comparable sales behind it are the raw material for the grid the hearing officer expects to see. And the official price index for the area shows how prices have moved since the January 1 lien date, which is the time adjustment you will have to argue. Identical inputs for the same address produce an identical result, so the other side cannot say you ran it until you liked the answer.

Two limits belong in the appeal letter itself. It is not an appraisal, and a board weighs it as an exhibit from a model, not as sworn testimony; where a county requires an appraiser's report, order one. And verify the comparables against the recorder before they go into the grid, because the board will check. Run the preview for the assessed address and compare its range with the notice before deciding whether an appeal is worth the fee.

California, Texas, Florida and New York side by side

Your assessor is a county office in most states (municipal in New York), and the notice carries its address and the appeal instructions; California's Board of Equalization keeps a directory of every county assessor⁴. When the notice and the market disagree, the market is the one you can prove.

Rates and deadlines change every year; the cited pages carry the current ones. This is general information, not legal or tax advice.

This article is general information, not legal, tax or investment advice. Figures and rules carry the year they were published; check the cited source for the current version.

Josef Eckmair MBA

Co-founder, CheckValue · Managing director, CBDNOL GmbH · More than 20 years in real estate in Tenerife and Austria · Reviewed by Christian Eckmair

Josef Eckmair MBA is co-founder of CheckValue and managing director of CBDNOL GmbH (Ansfelden, Austria). He has more than 20 years of real estate experience in Tenerife and Austria and writes about appraisals, taxes, selling costs and valuations for professionals.

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