What is the difference between assessed value and market value?

The assessed value of a property is the dollar amount the local tax assessor determines for the property and is the basis for how much property tax the homeowner will pay for the year. The assessed value is based on an official estimate of the property’s worth and is usually lower than the market value of the property. The market value of a property is the amount a willing buyer and seller agree upon during an arms-length transaction, and it determines how much a seller can ask for a property and how much a buyer is willing to pay. It is determined partly by the supply and demand of the housing market in the area, along with a variety of other factors such as the number of bedrooms, size of the lot, condition of the home and the home’s location. In Washington, the State Constitution requires that all real and personal property be assessed at its true and fair market value for property tax purposes. The assessed value set by the local assessor must reflect the same amount that would transpire from an open-market sale. It is important to note that the assessed value is not always the same as the market value – it is a general guide. As the market value fluctuates, the assessed value can also change even if no improvements are made to the property.

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What is the difference between assessed value and market value?

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