Assessed Value vs. Market Value: Why Your Home's Two Numbers Don't Match
Market value is what your home would likely sell for today. Assessed value is the number your county uses to calculate your property tax bill, and in many states it is deliberately set at a fraction of market value, not equal to it. If you've ever pulled up your assessment notice next to a Zillow estimate and been confused about why they don't match, you're not missing something — you're looking at two numbers that were never designed to be the same.
That confusion is also the reason so many homeowners either miss a real over-assessment or think they've found one when they haven't. Before you can judge whether your tax bill is fair, you need to know which number means what, and what your specific county does with it.
The Three Numbers People Mix Up
Market Value
Market value is what a willing buyer would pay a willing seller in an arm's-length sale, in current market conditions. It's the number a real estate agent gives you in a listing recommendation, and roughly what an automated valuation model like Zillow's Zestimate is trying to estimate. It moves with the market — interest rates, local demand, comparable sales — and can change month to month.
Appraised Value
Appraised value is a professional appraiser's or lender's opinion of market value, usually produced for a specific purpose: a purchase, a refinance, or a private appeal. It's an independent estimate, not automated, and it isn't automatically shared with your county assessor. Getting your home appraised for a refinance does not, by itself, change your tax assessment.
Assessed Value
Assessed value is the figure your local assessor's office assigns to your property for tax purposes. In some states and localities it's set equal to market value (a "100% assessment" jurisdiction). In many others, it's calculated as a percentage of market value — sometimes called the assessment ratio or the level of assessment — and that percentage varies by state, and sometimes by the type of property within a state. Your tax bill is calculated from the assessed value, not directly from market value: assessed value × local tax rate = your bill (often with exemptions applied first).
Most homeowners treat all three as interchangeable. They aren't, and the gap between assessed value and market value is where most confusion — and most missed appeals — happens.
How Your County Actually Gets to an Assessed Value
Mass Appraisal, Not a Custom Walkthrough
Most assessors don't send someone to personally re-evaluate your specific home every year. Instead, counties typically use "mass appraisal" — statistical models built from recent sales data in your area, applied across entire neighborhoods at once, using each property's recorded characteristics (square footage, lot size, age, condition, bedrooms/bathrooms). Your individual home is rarely singled out unless something changes — a permit, a sale, or a scheduled cycle reassessment.
Reassessment Cycles Vary by County
How often those models get rerun differs by state and even by county — some reassess annually, some every few years, and some only when a property sells or a permit is pulled. That schedule matters: a home's assessed value can lag behind a fast-moving market for a year or more between cycles, or jump when a delayed cycle finally catches up. Your county assessor's website will state its reassessment schedule.
The Concept That Actually Matters: The Assessment Ratio
This is the single most misunderstood piece of the property tax system, and it's the reason the most common homeowner mistake exists: comparing your assessed value directly to an online market-value estimate and concluding you're either overpaying or getting a deal.
Here's the problem with that comparison. If your county assesses at 100% of market value, comparing the two numbers directly makes sense. But if your county or state assesses at a fraction of market value, a lower assessed value than your home's market value is expected and normal — it tells you nothing about whether your assessment is fair. What matters is not the raw gap between assessed value and market value, but whether your assessed value, once you account for the ratio, is in line with what comparable homes are actually being assessed at.
A few real examples of how differently states handle this, each verified against an official source:
- South Carolina assesses an owner-occupied legal residence at 4% of fair market value, while non-owner-occupied real property is assessed at 6% (Spartanburg County, SC — Legal Residence).
- Louisiana assesses residential improvements at 10% of fair market value (St. Tammany Parish Assessor's Office — Market Value vs. Assessed Value FAQ).
- Cook County, Illinois assesses most residential property (homes and buildings of six units or fewer) at 10% of market value, even though Illinois law sets a statewide target level of 33⅓% — the gap is corrected with an equalization factor, covered below (Illinois Department of Revenue — 2024 Cook County Final Multiplier).
- West Virginia assesses property at 60% of its fair market value (West Virginia State Tax Division — Ad Valorem Property Tax).
These are four different states with four different ratios, and they don't represent every approach — some states and localities assess much closer to, or at, 100% of market value. This is the part you have to check for your own jurisdiction; don't assume any of the numbers above apply to you. Your county assessor's office or state department of revenue website will state the ratio, sometimes called the "level of assessment," "assessment ratio," or "equalization ratio."
Ratios Can Differ by Property Type Within the Same State
The fraction isn't always uniform even inside one state. South Carolina's own 4%/6% split is a built-in example: the lower 4% ratio applies specifically to a property that is your legal residence and owner-occupied, while a second home, rental, or other non-owner-occupied real property in the very same county is assessed at 6% (Spartanburg County, SC — Legal Residence). Confirming which class your property falls into — and whether you've actually filed for any owner-occupied classification you're entitled to — is worth checking before you compare your number to anyone else's.
Why a Low Assessed Value Isn't Automatically Good News
If you live somewhere with a 10% assessment ratio and your assessed value is $35,000 on a home that would sell for $350,000, that's not a discount — that's exactly what the formula predicts. The question that actually determines whether you're being treated fairly is: is your assessed value 10% of what your home would really sell for, or has the assessor's estimate of your market value drifted too high, so that your "10%" is actually landing above where it should? A ratio only protects you if it's applied consistently and to an accurate underlying market value estimate.
Exemptions Add Another Layer
Taxable Value Isn't Always the Same as Assessed Value
Even after the assessment ratio is applied, many jurisdictions subtract homestead exemptions, senior or veteran exemptions, or assessment caps before arriving at the final "taxable value" used to calculate your bill. That means your assessed value and the taxable value on your bill can be two more different numbers, and that gap is a legitimate, intentional discount — not an error to chase.
Use the Right Number When You Do the Math
When you work through the walkthrough later in this post, use your assessed value (before exemptions), not the final taxable value, when converting to an implied market value — otherwise you'll understate what the county's model actually believes your home is worth, and any comparison to comparable sales will be off.
Over-Assessed Even When the Market Is Rising
The Comparison That Actually Matters
It's easy to assume that if home values in your area are going up, your rising assessment is simply keeping pace and there's nothing to question. That's not always true. The comparison that actually determines whether you're over-assessed isn't "my assessment vs. last year's assessment" — it's your assessed value (converted to its implied market value, if your area uses a ratio) against what comparable homes in your area are actually assessed at and what they're actually selling for.
Common Reasons the Gap Opens Up
A home can be over-assessed in a rising market for several ordinary reasons: the assessor's model used comparable sales that don't really match your property, your home's condition or size in the county's records is wrong, or your neighborhood was revalued using a broader area's price trend that outran what's actually happening on your specific block. Rising market values everywhere else don't validate your specific number — only comparable sales and comparable assessments do.
Uniformity: The Argument Most Homeowners Never Consider
What a Uniformity Appeal Actually Argues
Most people think a property tax appeal has to be about market value — "my house isn't worth what they say it's worth." But in many jurisdictions there's a second, separate ground for appeal: uniformity, sometimes called equity. The argument isn't about what your home is worth; it's that similar homes in your area are being assessed at a lower percentage of their value than yours is, which by itself can be grounds for relief regardless of whether your market value estimate is technically correct.
A Verified Example, and Why It Varies
Texas is a clear, verifiable example: under Texas Tax Code Section 41.43, a property owner can win a protest by showing their property's appraised value exceeds the median appraised value of a reasonable number of comparable properties, appropriately adjusted — separate from and in addition to a straightforward market-value dispute (Texas Tax Code § 41.43, Texas Constitution and Statutes). Other states recognize similar equal-and-uniform or equalization principles, but the legal mechanics — what evidence is accepted, how comparables are chosen, what the standard of proof is — vary significantly by state and even by county. Whether this argument is available to you, and how strong it is, depends entirely on your local rules, so don't assume it applies without checking.
This is a genuinely underused argument. Many homeowners never learn it exists because they're focused only on "is my home worth less than the county says," when "are my neighbors' similar homes assessed lower than mine, proportionally" can be just as valid — and sometimes easier to prove.
Equalization Factors: The Multiplier You Might Not Know Exists
Why the Factor Exists
Some states apply a second layer of math on top of the local assessment ratio, called an equalization factor or multiplier. It exists because a state might require every county to assess at the same target level, but individual county assessors' actual practices drift away from that target over time. Rather than force every county to redo its assessments, the state calculates a multiplier that scales the whole county's assessments up or down to hit the statewide target.
The Illinois Example
Illinois is the clearest verifiable example. Cook County assesses residential property at roughly 10% of market value, but Illinois law sets a statewide target of 33⅓%. To reconcile the two, the Illinois Department of Revenue publishes an annual Cook County equalization factor — 3.0355 for the 2024 tax year — which is applied on top of the assessor's local value to produce the final "equalized assessed value" used to calculate tax bills (Illinois Department of Revenue — 2024 Cook County Final Multiplier). If your jurisdiction uses a multiplier like this, it's another number you need in hand before you can judge whether your bill reflects an accurate share of your home's value — check with your county or state revenue department for the current factor and how it's applied.
The Walkthrough: Finding Your Real Number
Here's the practical version, in order.
Step 1: Find Your Assessed Value
Your county assessor's website or your annual assessment notice will list this. It's often called "assessed value," "taxable value," or in some states "equalized assessed value" — read the label carefully, since some counties list both a pre-equalization and post-equalization figure.
Step 2: Find Your Jurisdiction's Assessment Ratio (and Equalization Factor, if Any)
Search "[your county] assessor assessment ratio" or check your state's department of revenue site. If your state uses an equalization factor on top of the local ratio, find the current year's factor too — it's usually published annually.
Step 3: Convert to an Implied Market Value
Example only — not a real property. Say your assessed value is $42,000, and your county's residential assessment ratio is 10%, with no additional equalization factor. Implied market value = assessed value ÷ ratio = $42,000 ÷ 0.10 = $420,000. That $420,000 is what the county's assessment says your home is worth on the open market — the number you should actually be comparing to reality.
Step 4: Compare That Implied Market Value to What Your Home Would Actually Sell For
Look at recent sales of genuinely comparable homes — similar size, age, condition, and location — not a single online estimate. If your implied market value from Step 3 is reasonably close to what those comparables suggest your home would sell for, your assessment is likely in line. If it's meaningfully higher, you may be over-assessed.
Example only. If Step 3 gives you an implied market value of $420,000, but three recent, genuinely comparable sales on your street closed between $355,000 and $375,000, that's a real gap worth investigating — not because $420,000 "feels high," but because it's out of step with actual comparable sales, converted using your own county's own ratio.
What Gap Is Actually Worth Appealing
Not every gap is worth the time. A difference of a few percent between your implied market value and what comparables suggest is often within the normal range of estimation error — assessors aren't valuing your exact home down to the dollar, and neither is any online tool. Appeals also typically take real time: gathering comparables, filing paperwork, sometimes attending a hearing.
As a general rule of thumb, gaps in the range of roughly 10% or more between your properly-converted implied market value and what comparable sales support are the ones most worth a closer look, though the right threshold for you depends on your home's value, your local tax rate, and how much effort your county's appeal process requires. A 5% gap on a $150,000 home is a very different amount of money — and a different amount of appeal effort — than a 5% gap on a $700,000 home. Be honest with yourself about the size of the gap before committing time to an appeal; a small one usually isn't worth pursuing, and a large one usually is.
The Checklist Before You Compare Your Number to Anyone Else's
Before you conclude you're over- or under-assessed, confirm you have all four pieces:
- Your assessed value (before exemptions), from your county assessor's site or notice.
- Your jurisdiction's assessment ratio, and whether it differs by property class (owner-occupied vs. rental, residential vs. commercial).
- Any equalization factor that applies on top of the local ratio, if your state uses one.
- Genuinely comparable recent sales in your area — not a single automated valuation estimate.
Skip any one of these and the comparison you're making probably isn't the comparison that matters.
Quick answers: assessed value vs. market value
Is assessed value supposed to be lower than market value?
Only in jurisdictions that use a fractional assessment ratio. If your area assesses at 100% of market value, the two numbers should be close. If your area uses a ratio below 100%, a lower assessed value is expected and, by itself, tells you nothing about whether the assessment is fair.
Does a high assessed-value-to-list-price ratio mean I'm overpaying in taxes?
Not automatically. Compare your assessed value to your jurisdiction's actual ratio and to what comparable homes are assessed at, not to a single online market-value estimate. The ratio, applied correctly, is what tells you whether you're in line with your neighbors.
Why did my assessed value go up but my neighbor's stayed flat?
It can happen for legitimate reasons — different revaluation cycles, a recent sale that triggered a reassessment, or differences in how each home's characteristics are recorded. It can also be a sign worth checking with a uniformity comparison, since assessors don't always revalue every property in a neighborhood at the same time or with the same accuracy.
Does getting my home appraised change my assessed value?
No. A private appraisal for a purchase or refinance is not automatically reported to your county assessor. Your assessed value changes only through your county's own reassessment cycle, permits, or a sale — not because a lender ordered an appraisal.
How do I find my county's assessment ratio if it isn't listed online?
Call or email your county assessor's office directly and ask for the current residential assessment ratio (or "level of assessment") and whether an equalization factor applies. This is public information assessors are used to providing.
Grove Hopper's free check at grovehopper.com walks through this same comparison for your specific address — pulling your assessed value, applying it against comparable properties, and flagging an estimated over-assessment if one exists — so you don't have to track down your county's ratio and run the math by hand. It's a starting point, not a filing: you review what it finds, and you decide whether and how to pursue an appeal yourself.