Assessed Value Definition

The assessed value is the value placed upon an object for the purposes of taxation; it is often significantly different from the object’s appraised value for mortgage loans or what it could sell for in the open marketplace. For example, in a given real estate market a house might be appraised at $250,000; sell for $265,000; but have an assessed value of $235,000. The homeowner would pay property taxes based upon the assessed value of $235,000. In practice, assessed values are derived through market-based formulas and often lag actual values by a few years.