Assessed Value vs Market Value: What the Difference Actually Costs You (2026)

Almost every property tax assessment notice in the United States shows at least two different values for the same house, and homeowners routinely appeal the wrong one.

The distinction is not academic. In a state like Georgia, your assessed value is 40% of what the county thinks your house is worth, so an assessed value of $180,000 is a claim that your home is worth $450,000. In Cook County, Illinois, the assessed value is 10% of market value. In Texas, there are three separate numbers on the notice, and the one that determines your tax bill often is not the one you are legally allowed to challenge.

Get this wrong and you either file a hopeless appeal or, more commonly, you look at a low-sounding assessed value, conclude everything is fine, and quietly overpay for years.

This guide explains what each number means, how the relationship differs across states, and how to work out in about five minutes whether the county's opinion of your home's value is defensible.

Want the answer instead of the theory? AppealMyTax pulls your parcel straight from the county roll, shows you the county's own numbers and how they compare to similar homes near you, and tells you whether there is a case worth filing. Free to check. Look up your address →

The three numbers on your notice

Terminology varies by state, but nearly every jurisdiction is tracking three distinct concepts.

1. Market value (also called just value in Florida, actual value in Colorado, fair market value in Georgia, appraised value in Texas, full value in New York)

This is the assessor's estimate of what your property would sell for in an arm's length transaction as of a specific date, usually January 1. This is the assessor's opinion of fact, and it is almost always the number you actually appeal.

Texas defines it carefully. Under Tax Code Section 23.01, districts must appraise at market value as of January 1, meaning the price the property would bring in an open market sale where both parties know the property's uses and neither is exploiting the other's urgency. The same section requires districts using mass appraisal to comply with the Uniform Standards of Professional Appraisal Practice and to appraise each property based on the individual characteristics that affect its value.

That last clause matters enormously, and we will come back to it.

2. Assessed value

This is market value multiplied by a statutory assessment ratio, and then reduced by any caps. In many states the ratio is not 100%, which is the single biggest source of confusion.

3. Taxable value

Assessed value minus exemptions (homestead, senior, veteran, disability, agricultural). This is what actually gets multiplied by the millage or tax rate to produce your bill.

Assessment ratios: why your assessed value looks "low"

Here is where homeowners get lulled. If you live in a state with a fractional assessment ratio, your assessed value will look reassuringly small next to what you believe your house is worth, and you will conclude you are getting a bargain. You may not be.

Always confirm the current figure with your own assessor, because several of these move. Colorado's residential rate in particular has been reset repeatedly by the legislature since 2020, most recently through SB24-233, so the correct divisor depends on the tax year. Our Colorado guide and Pennsylvania guide track the mechanics for those two.

The practical move: convert the assessed value back into the assessor's market claim, then judge that number.

If your Georgia notice says the assessed value is $180,000, the county is asserting your house is worth $450,000. Do not evaluate $180,000. Evaluate $450,000. Would your house sell for $450,000 tomorrow? If not, you have grounds.

The caps that hide an over-assessment

Two of the largest states cap how fast the assessed value can rise, which creates a trap that costs recent buyers real money.

Texas limits the appraised value of a residence homestead to 110% of the prior year's appraised value plus the value of new improvements, under Tax Code Section 23.23. The cap applies only to properties with a homestead exemption, and it takes effect January 1 of the year after you qualify.

Florida's Save Our Homes cap limits the annual increase in a homesteaded property's assessed value to the lower of 3% or the change in the Consumer Price Index, under Florida Statute 193.155(1).

Here is the trap. In a capped state, your assessed value can be well below market while your just or market value is badly wrong. If you appeal only when the assessed value looks high, you will never appeal, because the cap keeps it looking reasonable. Meanwhile the market value on the notice is climbing, and the moment the cap resets, you inherit the whole error at once.

Caps also reset on sale. This produces one of the most lopsided situations in American property tax, and we measured it: across 8.29 million Florida residential parcels on the 2025 final state roll, assessment caps shield $994.4 billion of value from taxation, roughly a quarter of all residential value in the state. But 28.4% of Florida homes, about 2.35 million parcels, carry no meaningful cap protection at all. Those are overwhelmingly recent buyers, whose cap reset to full market value the January after closing, plus new construction.

If you are in that unprotected 28.4%, you are paying tax on full market value while a long-held identical house next door may be assessed at a fraction of it. Your assessment accuracy is the only thing protecting you, which makes an error far more expensive.

Recently bought, refinanced, or built? You are in the group where assessment errors cost the most, because nothing is capping them. AppealMyTax checks your parcel against the county's own records in about 30 seconds, free, and the optional $49 report gives you the comparable-sales evidence in a filing-ready PDF. Check your assessment →

Why mass appraisal gets individual houses wrong

No assessor walked through your house. Counties value hundreds of thousands of parcels at once using computer-assisted mass appraisal: group similar properties, derive a value per square foot from recent sales, adjust for age, size, and a handful of coded characteristics.

The model is built to be right on average across a neighborhood. It is not built to be right about your specific house, and it structurally cannot see:

• Condition that is not in the county's records (an end-of-life roof, foundation movement, original 1978 kitchen, active water intrusion)
• Locational negatives at the parcel level (backing a highway, a commercial lot line, a drainage easement, no usable yard)
• Data errors on your property card (square footage that includes an unfinished basement or a garage conversion that never happened, a bathroom you do not have, a pool that was filled in)
• Functional obsolescence (a bedroom you can only reach through another bedroom, no primary bath, a chopped-up floor plan)

This is exactly why Texas law requires appraisal "based upon the individual characteristics that affect the property's market value." When the model ignores those characteristics for your parcel, the statutory standard has not been met, and that is your argument.

How to tell if the county's market number is defensible

The assessment industry has its own published accuracy standards, and you can hold your county to them.

The International Association of Assessing Officers publishes the standards that assessors are trained and audited against. From the IAAO Standard on Mass Appraisal of Real Property:

• Level of appraisal: the median assessment ratio for a group of properties should fall between 0.90 and 1.10. In plain terms, a county should be assessing homes at 90% to 110% of what they actually sell for.
• Coefficient of dispersion (COD): a measure of how consistent assessments are within a group. The standard is 5 to 10 for newer or fairly similar single-family homes and condominiums, and 5 to 15 for older or more heterogeneous areas.
• Price-related differential (PRD): should fall between 0.98 and 1.03. A PRD above 1.03 indicates regressivity, the condition where assessment ratios decline as value rises.

That last point deserves attention, because it cuts against intuition. Regressivity means modest homes get assessed at a higher percentage of their true value than expensive homes do. It is one of the most persistent and widely documented failure modes in mass appraisal, and it means an ordinary house in an ordinary neighborhood is often more likely to be over-assessed than a luxury property, not less.

Many states publish annual ratio studies with exactly these statistics by county. Search for your state's ratio study or equalization report. If your county's residential COD is 18 and the standard tops out at 15, that is a documented admission that assessments there are inconsistent, and it is a fair thing to bring to a hearing.

Does the gap mean you have a case?

Run the check in this order.

1. Convert. Divide the assessed value by your state's assessment ratio to recover the county's market claim. In Texas and most cap states, use the market or just value printed on the notice.
2. Sanity check the number. Would the house sell for that, today, in its actual condition? Be honest, not hopeful.
3. Compare to your own purchase. If you bought recently in an arm's length sale for less than the county's market claim, that closing price is among the strongest evidence that exists.
4. Compare per square foot to similar nearby homes. If comparable homes are assessed at $165 per square foot and you are at $205, that gap is your case, and in several states it is a standalone legal ground independent of market value.
5. Audit the property card. Pull your record from the assessor's site and verify square footage, bed and bath count, year built, lot size, and condition. Errors here are the fastest wins available, and they are often correctable informally without a hearing.

We built the fourth test into a tool because it is the one that requires data most homeowners cannot easily assemble. Our Texas over-assessment study applied it to 4,836,570 homes across 14 counties: 1,000,060 of them, about 21%, are assessed more than 5% above comparable homes in their own appraisal neighborhoods, carrying roughly $1.5 billion a year in excess tax. One home in five is not a rounding error, and it is not a Texas-specific phenomenon. It is what mass appraisal does everywhere.

What is the difference between assessed value and market value?

Market value is the assessor's estimate of what your property would sell for in an open, arm's length transaction as of the assessment date. Assessed value is that market value multiplied by a statutory assessment ratio and then reduced by any applicable caps. In some states the ratio is 100%, so the two are equal. In many others the assessed value is a fraction of market value, and comparing your assessed value directly to your home's worth will mislead you badly.

Which value do I actually appeal?

In almost every state you appeal the assessor's market, just, actual, or appraised value, not the assessed value or the tax bill. The assessment ratio is set by statute and is not appealable. The exemptions and the tax rate are not appealable either. What you can challenge is the assessor's opinion of what your property is worth, and separately, in many states, whether your property is assessed uniformly relative to comparable properties.

Can my assessed value be below market value and still be wrong?

Yes, and this is the most commonly missed scenario in capped states. Florida's Save Our Homes cap and Texas's 10% homestead cap hold the assessed value down while the market or just value on the notice keeps climbing. An inflated market value is still worth challenging, because it sets the ceiling that future capped increases build toward and it resets to full value when the property sells. Winning a lower market value lowers the base that every future year compounds from.

Deadlines are the part that actually ends the conversation

Every state runs a different calendar, and most appeal windows are short and strictly enforced. A few examples of how different they are:

• Texas: generally May 15 or 30 days after your notice was mailed, whichever is later
• Florida: 25 days after the TRIM notice mails, typically putting the deadline in mid-September
• Georgia: 45 days from the date on the annual notice of assessment
• Pennsylvania: commonly September 1 for the following tax year, though counties vary
• Illinois: no single statewide date, filed township by township as each is reassessed
• Colorado: a spring protest window fixed by statute

Find yours on the relevant state guide and calendar it now. Missing the window is the only mistake in this entire process that cannot be fixed later, and unlike a weak case, it costs you the whole year automatically.

Start with your own numbers

Pull your latest notice. Convert the assessed value back to the county's market claim using your state's ratio. Ask whether the house would actually sell for that. Then check whether similar homes near you are carrying a lower value per square foot.

If you would rather not assemble it by hand, that is what we built. AppealMyTax finds your parcel in 22.7 million real county records, shows you the assessor's own figures and how your home compares to similar properties nearby, and does that part for free. If there is a case worth making, the $49 report delivers the comparable-sales evidence in a filing-ready PDF, flat fee, one time, and you keep 100% of whatever you save. No percentage of your savings, ever.

Check what your county says your home is worth →

This guide is general information, not legal or tax advice. Assessment ratios, caps, and deadlines change and vary by county. Verify the current figures for your jurisdiction with your assessor or state department of revenue before filing.

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