Your home carries two values at once, and confusing them is expensive in both directions: sellers who price off the tax number leave money behind, and owners who panic over a market dip are sometimes watching a number their tax bill never uses. This page separates the two — what each one is, why they differ on purpose, and which decisions belong to which number.
Assessed value is the county's figure, and it exists for exactly one purpose: the property tax calculation in How are property taxes calculated? — assessed value, minus exemptions like the ones in What is a property tax exemption?, times the combined local rate. Market value is the market's figure: the price a willing buyer would pay today, discovered through comparable sales and tested at an actual closing. Nobody at the county sets it, and no buyer at your door cares what it is for tax purposes.
Three mechanisms keep the tax number below the market number. An assessment ratio taxes only a set percentage of value in many jurisdictions. Increase caps limit annual growth in assessed value in some states regardless of the market — a benefit that compounds the longer you own. And the assessment cycle itself — annual in some counties, multi-year in others, and reset by a sale in states like California (the reassessment guide covers the triggers) — means the county's figure describes a past market, not today's.
Take a home with a $400,000 market value in a jurisdiction assessing at 80 percent: the assessed value is $320,000 before exemptions, and the tax rate applies to that smaller figure (example only — your ratio, caps and exemptions are your jurisdiction's). If the same home's market value climbs to $440,000 while a cap holds its assessed growth to a few percent, the gap widens — the owner's equity grew by the full market move, while the tax bill grew by the capped one. That widening gap is the system working as written, not an error to report.
Taxes: assessed. Selling, equity, refinancing: market — your equity is market value minus everything you owe, and the appraisal a lender orders estimates market value, as How does a home appraisal work? explains. Appeals are the meeting point: an appeal argues the assessed figure overshoots what the market evidence supports under the jurisdiction's own rules, built the way How to appeal a property tax assessment lays out. The standing rule is simple — never price from the tax number, and never estimate your tax bill from the market number.
Homeowner HQ tracks the market side: your own agent refreshes your home's value and equity monthly, because those are the numbers your selling, borrowing and planning decisions run on. The assessed side arrives on the county's schedule in your assessment notice — and when the two disagree in a way that looks wrong (an assessment above what comparable sales support), your agent is the person who can read both numbers with you and tell you whether an appeal is worth its deadline. Correcting the facts your estimate is built from — rooms, condition, updates — is the market-side maintenance; the record attaches to your realtor only and is never sold or shared.
They are two numbers built for two different jobs. Assessed value is the value your local government — usually a county assessor — places on your home for property tax purposes: it is the figure your tax rate is applied to, after any assessment ratio and exemptions. Market value is the price a willing buyer would pay a willing seller for the home today, in an open sale with neither side forced — the number your eventual sale price, your home equity and a lender's appraisal all orbit. Because they serve different masters, they are computed differently and updated differently: the market moves daily with every nearby sale, while the assessment is set on the county's schedule, often at a legally fixed percentage of value and sometimes under a cap on yearly increases. Your Homeowner HQ estimate tracks the market side — what your home would sell for — because that is the number your decisions run on; your tax bill runs on the assessed side, and the two should never be substituted for each other.
Usually by design, in one of three ways. First, an assessment ratio: many jurisdictions tax only a fraction of value — a home with a $400,000 market value in a place that assesses at 80 percent carries a $320,000 assessed value before exemptions (a labeled example; ratios vary widely, from under 20 percent to a full 100 percent). Second, increase caps: some states limit how fast assessed value can climb each year — California's Proposition 13 caps it at 2 percent a year until the home sells — so a long-owned home's assessment falls further behind its market value every year the market rises. Third, the calendar: assessments are refreshed on a cycle of one to several years, so the county's number describes the market as of a past date. A lower assessment is not the county undervaluing your home in the market sense; it is the tax system working as written, and it means a lower tax bill, not a lower sale price.
Each decision has its own number. For your tax bill, only the assessed value matters: it, minus your exemptions, times the combined local rate is the bill, and no buyer's opinion of your home changes it. For selling, pricing and equity, only market value matters — buyers pay market value, your equity is market value minus what you owe, and a lender's appraiser estimates market value, not the tax figure; pricing a home off its tax assessment underprices it in most places. For a tax appeal, the two meet: you argue the assessed value is too high by showing, with recent comparable sales, that it sits above what the market evidence supports under your jurisdiction's own ratio and rules — which is why the appeal guide on this site builds its case from sold comparables, and why correcting the facts in your HQ record (the same facts an estimate is built from) is the market-side habit that pairs with it.
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No — three values, three makers. Appraised value is a licensed appraiser's formal opinion of market value at a point in time, the number a lender relies on. Assessed value is the tax office's figure, built for the tax calculation and usually a ratio-adjusted, sometimes capped version of value. The online estimate in your HQ record is a model's market-side read, refreshed monthly. The appraisal guide on this site walks through how the appraiser's number is made.
It is one of the most expensive shortcuts in selling. In a ratio or capped state the assessment can sit far below what buyers would pay, and pricing to it gives the difference to the buyer. Price from recent sold comparables near your home instead — the comparative market analysis guide shows how an agent builds that range — and let the assessment do its one job, the tax bill.