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The assessed value of a property represents the value that the IRS assigns a house for the purpose of property tax calculations.
The figure resulting from this evaluation of property can also be used to determine the charges a household pays for public services.
However, assessed value is not a good estimation of appraised or market value of a house.
This is because the methods used to calculate them can vary from state to state.
For example, some states would actually set assessed valuation at as little as 20% of appraised value. Meaning a house with a market value of $150,000 would have an assessed value of just $30,000.
The low figures have no material impact on the real market price of the house as they are just used for tax calculation purposes anyway.
If for one reason or another, a home owner disagrees with the assessed value and would like to dispute it, the county might appoint an appraiser to conduct a new assessment.
The new appraised value will then be multiplied by the assessment rate to derive the assessed value.
These types of valuation disputes can sometimes arise because a homeowner do not believe that he should be paying so much property tax. It could also be that he feels that his home is undervalued, which could be a material factor in selling his house at a good price.
Do take note that valuation methods for land are different from improvements (houses).