Tax assessed values

If appraised values are based upon the recent sales of a comp property. Can you please explain what or how are tax assessed values calculated upon? Is it true that the tax assessed value is always lower than the sale price / appraised value, especially considering that the properties I deal with are foreclosures?

Thanks, Robert

You don’t tell us your location so we really can’t be accurate in describing how the assessed values might be determined in your location.

The determination of a property’s assessed value is done by the local assessor. The Assessor takes various factors into account when establishing property value, including:
[]Description of the property and the improvements []Land value []Lot dimensions[]Age of Home and other buildings []Building and square footage[]Value-enhancing amenities[*]Sales of like homes within the neighborhood
The assessed value may be the property’s current market value or a percentage of the current market value.

Once the assessed value is determined for a given year, the assessor might not reassess the property’s market value for several years. In the interim, a formula might be used to adjust the tax assessed value. Here is one method to determine the annual adjustment:
Take the previous year’s taxable value

  • Subtract losses
    X Multiply Consumer Price Index (2.3% for 2005)
  • Add Additions
    Each taxing jurisdiction has its own formula or method. Your local assessor’s website may give you more insight.