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As my research, there are two criteria on home values. Market Value and Assessed Value. Market Value used between buyer and seller to get agree on sales price and Assessed Value is used to calculate taxes. It is more about between you and government.

Let's assume I found a house 400K (after negotiation) and it assessed value is 330K. And house is move-in condition and worth for it. All the inspections are done soever. At first look assessed values is on my side. Because I will need to pay less taxes in future.

Does it bring any disadvantages in future to have lower Assessed Value against Market Value? Does it effect anything in future while I am selling the home?

Teoman shipahi
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1 Answers1

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The relationship between assessed value and fair market Value is zero. In some jurisdictions they are in lock step, in other cases they are not. Some places only reassess every three years (Maryland), others every year. Some places also limit the maximum jump is assessed value between re-assessments, others have no limit. In fact in a hot market, or a cratering market, the big change in assessed values may take place next year based on what happened this year.

You need to know what your taxes will be if nothing changes, you also need to ask what the relationship between the two values was in previous years. This is important to estimate how your taxes will change next year. In jurisdictions with delayed assessments or ones that limit the jumps, sale of the house will trigger a new assessment that will not have a change limit. This next years assessment could match the fair market value.

Each year you need to make sure that your assessed value is not out of the norm for you community and style of house.

mhoran_psprep
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