When you get your property tax bill, you'll see two different values for your home: the assessed value and — if you look up your Zillow estimate or your purchase price — what the market thinks your home is worth. These numbers are almost never the same.
Understanding the difference matters. It affects how much you pay, whether you should appeal, and how tax increases actually work.
Market Value: What Your Home Would Sell For
Market value is the price a willing buyer would pay a willing seller in an open, competitive market. It's what real estate agents use when pricing listings, what appraisers determine for mortgage purposes, and what shows up on sites like Zillow or Redfin as an "estimate."
Market value fluctuates constantly. It responds to interest rates, neighborhood demand, comparable sales, and the condition of your specific property. In a hot market, it can jump 10% or 20% in a year.
Your county assessor is trying to estimate this number — but they're doing it for every property in the county at once, on a schedule.
Assessed Value: What the County Uses for Taxes
Assessed value is the county's official determination of your property's value for tax purposes. It's not always equal to market value. In fact, it's often intentionally set lower.
Most states use what's called an assessment ratio — a percentage of market value that becomes the assessed value. Common ratios:
- ›100% — assessed value equals estimated market value (common in many states)
- ›50% — assessed value is half of estimated market value (Illinois, Minnesota, and others)
- ›40% — Georgia assesses at 40% of fair market value
- ›10% — Louisiana assesses residential property at just 10% of market value
So a home with a $400,000 market value in Georgia would have an assessed value around $160,000. Your tax rate is applied to that $160,000, not the $400,000.
This is why comparing tax rates across states requires knowing the assessment ratio. A 2% tax rate on 50% assessed value is the same effective rate as 1% on 100% assessed value.
Why the Gap Matters
For your tax bill: A higher assessed value means a higher bill, all else equal. If your assessed value looks inflated relative to what similar homes are actually selling for, you may be overpaying — and that's appealable.
For appeals: Most counties let you appeal your assessed value if you can show it's higher than market value. The evidence is usually recent comparable sales in your neighborhood. If homes like yours are selling for $350,000 and your assessed value implies a $420,000 market value, you have a case.
For year-over-year changes: Even if the market surges, some states limit how much your assessed value can increase annually. California's Proposition 13 caps increases at 2% per year. Michigan caps increases at 5% or the rate of inflation, whichever is lower. Texas caps increases at 10% per year for homestead properties. These caps can create large gaps between assessed value and market value for long-term owners.
Taxable Value: One More Layer
In many states, there's a third number: taxable value. This is what you get after applying exemptions to your assessed value.
If your assessed value is $250,000 and you have a $50,000 homestead exemption, your taxable value is $200,000. Your tax rate is applied to $200,000.
So the full chain looks like this:
Market value → Assessed value (via assessment ratio) → Taxable value (after exemptions) → Tax bill (taxable value × mill rate)
How to Check If Your Assessment Is Fair
Look up your county's assessment ratio — your assessor's website usually publishes it. Multiply your market value estimate by that ratio. If the result is significantly lower than your current assessed value, you may have grounds for an appeal.
You can also look up comparable properties in your county's public assessment database. If neighbors with similar homes are assessed lower, that's relevant evidence.
Appealing your assessment is more straightforward than most people think. It doesn't require a lawyer, and the filing fee (where one exists) is usually small. The burden of proof is on you to show the assessment is inaccurate — but comparable sales data is usually enough.