Appraised Value vs. Assessed Value: What’s the Difference?
By: Joshua A. Carlson
Is the Appraised value the same as the Assessed value of a property? This is a common question that many people get confused about and think these words mean the same thing. The answer is very simple… NO…appraised and assessed values are not the same.
People often get these terms confused because they are both quantifiable numbers which establish an amount or value to a property.
Let’s look at the difference between the two…
APPRAISED VALUE: Appraised value, also known as market value, is usually done to determine the value of a property for a financial institution before a home is sold. The financial institution orders an appraisal to be conducted by a Certified Commercial Real Estate Appraisal professional who is an independent 3rd party. The appraiser is not associated with the Buyer or Seller of the property.
ASSESSED VALUE: Assessed values are used to determine the Tax Basis of the property for collecting the appropriate taxes to meet the annual budget set by the taxing authority of the county. What it is not: The assessed value is NOT to provide a buyer the price they should pay for the home. This value may also be used as a basis on your Reverse 1031 Exchange. Visit 1031specialists.com to know What is a Reverse 1031 Exchange.
Also, an assessor may not be a licensed appraiser and may not have seen the property to value the condition of it. A lot of the assessor’s information is based on public record and not verification of properties condition. Each year the West Palm Beach Property Appraisal office determines the market value of each property as of January 1 then deducts any benefits such as “Save Our Home” or “any caps on non-homestead Properties” and arrives at the assessed value.
A Simple easy to understand formula is: Assessed Value = January 1st Market Value – Any Benefits.
As you can see the properties ASSESSED VALUE and APPRAISED VALUE have 2 different purposes, one for tax purposes and the other for people interested in buying and selling of a home. For more information about a properties assessed value you can visit: http://www.co.palm-beach.fl.us/PAPA/index.htm.
Stay tuned for more tips and important information regarding your Home: Inside and Out…
