Assessed Value vs. Market Value: What's the Difference?
If you've looked at your property tax statement and wondered why the number seems too high, the answer often lies in the difference between assessed value and market value.
What Is Market Value?
Market value is an estimate of what a property would sell for on the open market under normal conditions. It changes over time based on local real estate conditions, the physical condition of the property, and broader economic factors. The most reliable way to estimate market value is by looking at recent sales of comparable properties.
What Is Assessed Value?
Assessed value is the value your county assigns to your property for the purpose of calculating property taxes. In many states, assessed value is a percentage of market value. For example, Missouri assesses residential property at 19% of market value. In Cook County, Illinois, the rate is 10%. In Texas, properties are assessed at 100%.
Even a small overestimate of market value by the county can result in a higher assessed value — and a higher tax bill.
How the Two Are Connected
County estimates market value → Assessment ratio applied (varies by state) → Assessed value determined → Tax rate applied → Your property tax bill. If the county's market value estimate is too high, everything downstream is inflated.
Why the Difference Matters for Appeals
When you file a property tax appeal, you are typically challenging the county's estimate of your property's market value. You present comparable sales showing that your market value is lower than what the county determined. The county reviews your evidence and decides whether to adjust.
Common Reasons Assessed Value May Be Too High
- Market decline: Property values dropped since the last reassessment.
- Property condition: Needed repairs or outdated features not accounted for.
- Data errors: Incorrect square footage, room count, or lot size in county records.
- Location factors: Proximity to noise, traffic, or environmental concerns.
- Unequal assessment: Your property assessed higher than comparable neighbors.
How to Evaluate Your Own Assessment
Compare your assessed value to actual recent sales of similar properties. SmartAppealTool provides a free initial screening. Visit our How It Works page for details, or check the Counties page for your county's information.