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The assessment leads to an "assessed value," which is a base number used in the calculation of the property tax. There is a relationship between the assessed value and the tax liability. The higher the assessment, the higher the tax bill. In some jurisdictions, the assessed value is meant to equal the market value of a property.
This is unfortunate for one of the two parties. It is the obligation of a real property appraiser to estimate the true market value of a property and not its market price. Frequently, properties are assessed at a value below their market values; this is known as fractional assessment. [5]
Many jurisdictions impose tax on a value that is only a portion of market value. This assessed value is the market value times an assessment ratio. [27] Assessment ratios are often set by local taxing jurisdictions. However, some states impose constraints on the assessment ratios used by taxing jurisdictions within the state. [27]
Understanding your home's value is an important part of knowing your net worth, what you'll likely receive if you sell the property and how the local real estate market is faring. Home value is ...
The Government introduced market value assessment and the new system was offered to municipal governments on a voluntary basis. [6] Since the new system was voluntary, not all municipalities implemented market value assessment. As a result, property assessments differed from municipality to municipality.
This "assessed value" may be increased only by a maximum of 2% per year until, and unless, the property has a change of ownership. [22] At the time of the change in ownership the low assessed value may be reassessed to complete current market value that will produce a new base year value for the property, but future assessments are likewise ...
Equalization is a step in property taxation to bring a uniformity to tax assessment levels across different geographical areas or classes of properties. Equalization is usually in the form of a uniform percentage of increase or decrease to each area or class of property.
The property tax amount is a percentage of the property's assessed value. Sometimes, the assessed value and the market value are set by law to be the same value. When the assessed value is a percentage of the market value, this is called "fractional assessment". Market value is usually the amount for which the property can be sold in an arms ...