I tried looking this up but didn’t find a satisfying answer. When a home is assessed for its taxable value, why isn’t the market value just used?
The simple answer is that the government teams who assess them can’t know the exact market value unless the home they’re assessing sells on the date that their assessment is meant to be for. There’s no other way to obtain the market value other than selling the actual house.
What someone lists a home for is not the market value, what someone bought the home for 6 months ago is not the market value, and about a hundred other things from renos to rezoning to even a murder can change the market value of a property overnight.
So these teams use a “good enough” approach which statistically analyze based on property size, location, age, known building information, etc. and then combine this with historical sales data to try to get a decent number so that property taxes can be applied reasonably fairly.
Absolutely, and just to expand on why they can be wildly inaccurate. Local governments have different ways of updating assessments. Most are simply small increases to the assessment every year. Small enough that they haven’t kept up with the market. If you watch, there are usually huge jumps on assessed value when a property sells because that sale value (aka market value) gets recorded as the assessed value.
Because it’s all made up bullshit.
Cause capitalism says fuck you! That’s why
Probably because the assessed value is what you are taxed on, so it is usually lower and more conservative of an estimate because people with houses don’t like taxes (and maybe have more political will than renters). You can google this stuff, what did you find? I found this article: https://www.forbes.com/advisor/mortgages/assessed-value-vs-market-value/
