What does "assessed value" mean?

Assessed value refers to the value assigned to a property by a local government or tax authority for the purpose of property taxation. This value is determined through a systematic process of evaluating various factors related to the property, including its size, location, improvements, and market trends. The assessed value is crucial because it directly influences the amount of property taxes that the owner will be required to pay.

Since governments need a standardized way to determine tax revenues from real estate, the assessed value serves this purpose, differing from the legal value (which is subjective and determined by the owner), the average market value (which may fluctuate and is not specific to individual properties), and estimates of sale value (which can vary widely based on many conditions, including personal negotiations and market conditions). This distinction emphasizes the unique role of assessed value in local government taxation practices.