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What Is the the Difference Between Assessed Value & Taxable Value of Real Estate?

by Fraser Sherman, studioD

The definitions of taxable value and assessed value vary from state to state. In Tennessee, for example, assessed value is a percentage of the market value of your property, and it's that percentage that you pay tax on. In Florida, assessed value is the market value adjusted for various factors; and taxable value is the basis for your property tax.


Some states assess your property's value every year. Other states may wait anywhere from two to six years, or only reassess when you sell or make major additions to the house. This can leave a big gap between assessed value and actual value. If you just bought a house and got a new assessment, say, your tax bill may be much higher than your neighbor who's owned an identical house for 20 years.

Taxable Value

States can tax the full market value of your property, but most do not. In Tennessee, for example, the assessed value on your personal home is set to 25 percent of the appraised value; for commercial land, it's 40 percent. The assessed value is the amount that's actually taxable. In Florida, when you buy a house the assessed value is equal to the market value. If you can't claim any exemptions, your taxable value equals your assessed value.

Tax Breaks

States offer a variety of tax breaks that knock down the taxable or assessed value of your house. Florida lets a resident homeowner subtract $25,000 from the assessed value of her house. In California, unless a home is sold or improved, assessed value can only rise 2 percent from year to year or at the rate of inflation, whichever is lower. Some states offer added breaks for seniors, veterans or the disabled, all of which lower the value that you pay tax on.


If your assessment is wrong, your taxable or assessed value won't be accurate either. For example, if your property value drops but your next reassessment isn't for two or three years, you spend those years with a taxable value that's higher than the house is worth. In other cases, assessors overvalue your house: for example, a typo stating that your house ii "2,600 square feet" instead of "2,300" can do that. Your local assessment office should have instructions on how to appeal values that you think are unfair.

About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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