Tax Value vs. Appraisal Value of a House

Houses, and real estate in general, are assigned different values depending upon who conducts the appraisal. These values include, but are not limited to, tax values and appraised values.

Tax Value

A tax value is assigned to real estate, be it a house, vacant land or commercial real estate, by a governmental taxing authority. It is determined by multiplying the actual value by the assessment rate of the property.

Taxing Authority's Actual Value

The taxing authority determines the actual value of a property by conducting a mass appraisal of the area in which the property is located, based on sales that took place in the two years before the assessment date.

Purpose of Tax Value

An assessment rate is a predetermined percentage that is multiplied by the actual value to arrive at the tax value. The tax value is used for tax purposes.

Appraisal Value

An appraisal value is determined by an independent appraiser who charges a fee for his services. The appraiser arrives at a value opinion based on single comparable sales in the property's general area or neighborhood.

Purpose of Appraisal Value

An appraisal value is used to determine a selling price and/or the loan amount permissible on a piece of real estate.

References

• Adams County, Colorado: Glossary of Assessment Terms