Tax Assessment vs. Appraisal Value and Property Tax Appeal

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What is the difference between the appraisal value and assessed value of a homestead in terms of property taxes? Despite the frequency at which these terms are used interchangeably, the definitions of tax-assessed value and appraised value differ. In this blog, we will discuss how these terms differ, how to appeal your Texas property tax assessment, and important factors associated with the tax valuation of a property.

Counties, municipalities, and cities impose property taxes on homeowners. The funds from these taxes get used by the local government for various purposes, such as schools and public safety. For homeowners, it’s essential to know the value of your home and how it gets calculated. Most homes have an assessed value and appraised value. Tax assessed values are used only by the property tax authority of your county or municipality to calculate the property tax bill. Tax jurisdictions determine the tax rates and the methods used to assess the properties.

The Difference Between a Tax Assessment vs. Appraisal Value

In short, a real estate appraiser, mortgage lender, or tax assessor will determine the fair market valuation of the house at that specific time. Appraisers visit homes to evaluate the condition of the property and any alterations that were made to the home. All improvements are taken into account, as well as the area’s external market value in comparable sales. This information is used to determine the fair buyer market value for the house. Real estate assessments are carried out annually to determine how much property tax is due by the homeowner. Let’s break down these terms in more detail:

The Assessed Value of a Home

A home’s tax assessed value (also known as the assessment ratio or assessment rate) represents an annual estimation of the value of a property. Government tax assessors assign property owners a valuation every year as a means of measuring property taxes. The assessed value of a property is often lower than its appraised value or true market value. Tax-assessed values are used by your local government to determine how much property tax you should pay.

These local government-employed assessors are responsible for researching and assigning fair, tax-assessed values to properties based on other property values in the area. Several factors are used to determine tax-assessed value, including historical property data, the findings of a home inspection, and comparative market analysis. This value can also include the property’s appraised value, fair market value, and any improvements that have been made to the property.

What is the Appraised Value of a Home?

The appraised value of your home is a representation of an expert’s estimation of how much your property is worth. The appraised value is used to determine a suitable sales price under the current market conditions. Due to the fact that your home appraisal value is the opinion of an independent professional, it is possible for two home appraisers to arrive at different valuations.

The appraisal of a home is typically ordered by mortgage lenders before a home loan is issued, and is used to ensure that the lender isn’t borrowing more money than the home is worth. The three main elements of an appraisal are a property inspection, a review of comparable sales (comps) in the area, and the issuance of a final appraisal report. Factors such as square footage, the number of rooms, comps in the region, and the general state of repair or improvements are used to determine the appraisal value.

Appraisers then document their findings in formal reports. Observations about the property will be listed along with the appraised value of the home. This report will also note the calculations used to arrive at the property appraisal value.

Property Tax Appeal

After home appraisers have determined the market value of your home, the assessed value of your home will determine the asking price and fees for tax purposes.

If the owner or seller feels that the value of a property has been assessed incorrectly, you can contest or appeal the tax assessment. You have two months from the assessment to appeal.

Speak to Our Team for Professional Property Tax Solutions in Texas

American Finance and Investment Company, Inc. (AFIC) has been assisting homeowners and business property owners in Texas for over 70 years. We have the highest Better Business Bureau rating and have some of the most durable financial backings in the industry, ensuring our business is viable and will remain so for many years to come. We operate widely across Texas and offer residential property tax loans in all counties.

To get help to pay your property taxes and avoid property tax foreclosure, contact us today for clarification on property tax assessment vs. appraisal or get a property tax loan estimate by completing the form below.

Ernest Eisenberg

Ernest Eisenberg, President of American Finance & Investment Co., Inc. (AFIC), brings a wealth of expertise in non-traditional financing, including property tax loans and non-bank mortgage solutions. His vision is characterized by a commitment to offering flexible financing solutions to Texas property owners.

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