Assessed Value

Assessed value is what your local government says your property is worth for tax purposes. A county tax assessor (not a real estate appraiser) assigns this number based on their methodology, which varies by jurisdiction. Property taxes are then calculated as a percentage of the assessed value.

In many areas, assessed values are updated infrequently, sometimes annually and sometimes every few years. They can lag significantly behind current market conditions.

In Alabama, property is assessed at a percentage of its appraised value for tax purposes. In Tennessee, similar structures apply but details vary by county. Your county assessor can explain how your property taxes are calculated locally.

Assessed value matters because it directly affects your property tax bill. Understanding how your property is assessed, and knowing that it often differs from market value, helps you understand your tax obligations and gives you a basis to appeal if you believe the assessment is inaccurate.

Buyers sometimes see assessed value on a listing and assume it reflects what the home is worth to buy. It typically doesn't. Market value is driven by what buyers are willing to pay; assessed value is a tax calculation.

A home sells for $425,000 in the current market. The county's assessed value for that same property shows $285,000, a figure based on a valuation formula that hasn't been updated to reflect recent price growth. The new owner's property taxes will be based on the assessed value, not the purchase price.

"Assessed value is the same as market value."

These are usually different numbers, sometimes significantly so. Market value is what buyers will pay in the current market. Assessed value is a government calculation for tax purposes. Neither one is automatically right or wrong; they're just measuring different things.