What is the difference between assessed value and market value?

The difference between assessed value and market value relates to property tax law in Arizona. Assessed value is what the government has assessed your property to be worth for the purpose of taxation. This value takes into account the market value, as well as other factors, such as the location of the property and its development potential. Market value, however, is the price the property could be purchased or sold for on the open market. Essentially, the assessed value for tax purposes is usually lower than the market value. That is, the government assesses your property at a value lower than what you may be able to sell it for. This valuation is done to calculate the amount of property taxes you’ll be responsible for. In most cases, the assessed value is determined simply by multiplying the local market value by a certain percentage. For example, in some Arizona counties, the assessed value is 100% of the market value. This means that if the market value of your property is $250,000, then the assessed value is also $250,000. In other counties, the assessed value is a fixed percentage of the market value, usually around 75%, again depending on the county.

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