Frequently when showing buyers properties or discussing making an offer on a particular property a buyer will want to know the tax valuation on the home. Of course we always provide the answer, but remind them that the tax assessment on the home is not related to the market value, the two figures are mutually exclusive. Market valuation is the price currently set for a home based on recent neighborhood sales and the overall real estate market, it is what a buyer would pay to purchase the property. Property tax valuation is the basis for which an owner will pay property taxes.
The appraisal district for a county assesses homes based on an exterior analysis along with general market knowledge as of January 1st each year. Since Texas is a non-disclosure state (meaning the price you pay for a property is not public knowledge) the appraisal district is not able to use an actual sales price of a property unless a new property owner replies to the appraisal districts optional purchase price survey giving them that particular information. Homeowners will receive the districts assessment in May each year with their valuation for the year. In order to save money on property taxes owners will want the tax assessment value to be as low as possible and have the option protest the valuation if they believe it to be too high.
Market valuation is determined through an analysis of similar properties that have recently sold. The information used to determine this value is not public information so you will need a real estate agent or an appraisers to share the information and how your home fits into the market.
To further demonstrate the disconnect between these two numbers, consider two home owners in the same neighborhood with the same floor plan and amenities. Owner A has consistently and successfully protested to keep his tax valuation lower for several years while Owner B has accepted the ever increasing tax valuation each year without protest. When these owners put their homes on the market should it really matter what the property tax valuation is? In fact as a buyer you may prefer the home with the lower valuation so your taxes will also be lower, but it does not mean the property is worth any less on the real estate market.
Tax valuations come out each May so if your home goes down in value, just breathe a sigh of relief for a lower tax bill and if you need a market valuation on your home contact your RE/MAX Prestige agent to provide you with our solid, market information and knowledge without any obligation.
(Of course, this information is most relevant to to the North Texas area where we specialize. If you live in another area, please consult a local REALTOR(r) for information about tax assessments and valuations in your area.)