valuation

assessed value

Assessed value is the value a local tax assessor places on a property for property tax purposes. It may be a percentage of market value, called the assessment ratio, or equal to market value, depending on the jurisdiction. Property tax is calculated by applying the tax rate (often expressed in mills) to the assessed value after any exemptions. Assessed value can differ significantly from market value and appraised value.

Exam tip: Taxes are calculated on assessed value, not market value. Watch for steps: market value x assessment ratio x equalization factor, minus exemptions, x tax rate.
Example: A home with $300,000 market value is assessed at 40%, or $120,000; at 50 mills the tax is $6,000.

1. A $4,000,000 sewer project is assessed against properties with a combined assessed value of $160,000,000, payable over 5 years. What is the ANNUAL assessment on a property assessed at $240,000?

Answer & explanation

Answer: D. Rate = $4,000,000 / $160,000,000 = $0.025 per $1. Total = $240,000 x 0.025 = $6,000; annual = $6,000 / 5 = $1,200.

Related terms & state variants

ad valorem tax equalization factor homestead exemption market value mill rate

Sources

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Last verified: 2026-10-23