How to Use This Calculator
- 1
Enter Property Values
Input your property's assessed value (from the tax assessor's office) and its estimated market value (from a recent appraisal, Zillow estimate, or comparable sales).
- 2
Review Results
See Assessment Ratio, Value Difference, and Appeal Potential cards. The Insights panel shows the over/under gap, untaxed equity buffer, estimated tax savings, equity gap as a percentage of market value, assessment status, and appeal recommendation.
Example Calculation
A homeowner compares their property's assessed value of $300,000 against a recent market appraisal of $375,000.
Assessed Value ($)
300,000
Market Value ($)
375,000
Results
Assessment Ratio
80.00%
Value Difference
$75,000
Appeal Potential
Weak
Insights card shows 20.
Tips
80% Assessment Ratio Saves You $750/Year at a 1% Tax Rate
Your $300,000 assessed value means you pay taxes on $75,000 less than the market value. At a 1% property tax rate, that's $3,000/year instead of $3,750 — saving $750 annually. At 1.25%, the savings jump to $937.50. If your jurisdiction reassesses to 100% of market, your tax bill increases by that amount.
Over 110% Ratio Is the Strongest Appeal Trigger
At 80%, you have no appeal case — you're paying less than market value warrants. If your assessed value were $415,000 on a $375,000 market value (110.7% ratio), you'd have a strong appeal case. Gather 3-5 comparable sales within 6-12 months and an independent appraisal to support your claim.
The $75,000 Gap May Close at Next Reassessment
Most jurisdictions reassess every 3-5 years. If your market value stays at $375,000 and the assessor adjusts to 90%, your assessed value jumps to $337,500 — an additional $375/year in taxes at 1%. Track local reassessment schedules to anticipate changes.
Under-Assessment Benefits Disappear When You Sell
Your 80% ratio means lower annual taxes, but the buyer's assessed value will likely reset to the purchase price. If you sell for $375,000, the new owner's taxes jump from $3,000 to $3,750 (at 1%). In states like California (Prop 13), the assessed value only resets on sale — making this gap a significant long-term tax advantage.
Is Your Property Fairly Assessed for Taxes?
The Assessed vs. Market Value Comparison Calculator reveals whether your property's tax assessment reflects its true market worth.
With a $300,000 assessed value and $375,000 market value, the assessment ratio is 80% — meaning $75,000 of your property's value is shielded from taxation.
At a 1% tax rate, this saves $750 per year compared to being taxed at full market value.
The Assessment Ratio Formula
Two key calculations drive the comparison:
Assessment Ratio = (Assessed Value / Market Value) × 100
Value Difference = Market Value - Assessed Value
Over/Under Gap = (Market Value - Assessed Value) / Market Value × 100
Assessment thresholds:
Below 70%: Significantly under-assessed
70% - 80%: Under-assessed (below typical threshold)
80% - 100%: Fairly assessed (normal range)
100% - 110%: Slightly over-assessed (monitor)
Above 110%: Over-assessed (appeal recommended)
Example: $300,000 Assessed vs $375,000 Market
$300,000 assessed value, $375,000 market value:
| Metric | Value | Context |
|---|---|---|
| Assessment Ratio | 80.00% | Fairly assessed — within normal range |
| Value Difference | $75,000 | Market exceeds assessed |
| Appeal Potential | Weak | No appeal advantage at 80% ratio |
| Over/Under Gap | 20.0% | Market is 20% above assessed |
| Untaxed Equity Buffer | $75,000 | Shielded from property tax |
| Tax Savings at 1% Rate | $750/year | vs being taxed at market value |
| Assessment Status | Fairly Assessed | Within 80-100% range |
At 80%, this property is assessed within the normal range that most jurisdictions target.
The $75,000 untaxed equity buffer provides a meaningful tax advantage — but it could narrow at the next reassessment cycle.
When Does an Appeal Make Sense?
The key threshold is 100%.
Below it, you're paying taxes on less than market value — no appeal needed.
Above 100%, you're overpaying.
Above 110%, you have a strong case.
For the example property, the assessed value would need to exceed $375,000 (the market value) before an appeal becomes worthwhile.
At $412,500 assessed (110% ratio), the homeowner would pay $1,125/year more than market value warrants at a 1% rate.
Frequently Asked Questions
What does the assessment ratio mean?
It's your assessed value as a percentage of market value: $300,000 / $375,000 = 80%. Below 80% means under-assessed (lower taxes). Between 80-100% is fair. Above 100% means you're taxed on more than the property is worth — grounds for appeal. Above 110% is a strong appeal case.
What is the untaxed equity buffer?
The dollar amount of market value not subject to property tax. At $300,000 assessed vs $375,000 market, $75,000 is shielded from taxation. At a 1% tax rate, this buffer saves you $750 per year. The buffer shrinks when assessors raise values closer to market.
When should I appeal my assessment?
When the assessment ratio exceeds 100% — meaning your assessed value is higher than market value. Above 110% gives you a strong case. You'll need evidence: 3-5 comparable sales within 6-12 months, an independent appraisal, or documentation of property damage. Most jurisdictions have a 30-90 day appeal window after assessment notices.
How are property taxes calculated from assessed value?
Annual Tax = Assessed Value × Tax Rate. At $300,000 assessed and a 1% rate: $300,000 × 0.01 = $3,000/year. If assessed at full market value ($375,000): $3,750/year. The tax rate (mill rate) varies by jurisdiction — typically 0.5% to 2.5% of assessed value.
Why is my assessed value lower than market value?
Three common reasons: (1) assessments lag the market — they're updated every 3-5 years while market values change daily; (2) some jurisdictions intentionally assess below market (e.g., 80%) as policy; (3) states like California cap annual assessment increases (Prop 13 limits to 2%/year). All three create gaps between assessed and market values.
What's the difference between assessed value and appraised value?
Assessed value is set by the tax assessor's office for property tax calculation — it may follow specific formulas or caps. Appraised value is determined by a licensed appraiser for lending purposes — it reflects current market conditions using comparable sales, replacement cost, and income approaches. They serve different purposes and often produce different numbers.