What is Assessed Value in Real Estate?
Assessed value in real estate refers to the value of a property as determined by a government assessor or appraiser for the purpose of calculating property taxes. The assessed value is typically based on a variety of factors, including the size and condition of the property, its location, and any improvements or features that have been made to the property.
The assessed value is usually expressed as a percentage of the property's fair market value, which is the price that the property would likely fetch if it were put up for sale on the open market. For example, if a property has a fair market value of $500,000 and an assessed value of $400,000, its assessed value would be 80% of its fair market value.
The assessed value is used to calculate the property tax that a property owner is required to pay. Property tax rates are typically set by local governments and are based on the assessed value of the property. For example, if a property has an assessed value of $400,000 and the local property tax rate is 1%, the property owner would be required to pay $4,000 in property taxes.
Assessed value is an important consideration for property owners, as it can affect the amount of property tax that they are required to pay. It is also an important consideration for real estate investors, as it can affect the profitability of a property and the return on investment for the owner.
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