What does "assessed value" mean on a property tax bill?

Assessed value is the dollar figure a local assessor or state formula assigns to a property specifically for calculating property tax and exemption amounts. It is derived from market value but, in many states, equals only a fraction of it — set by a statutory assessment ratio — rather than matching what the home would actually sell for. Property tax rates and most exemption dollar amounts are applied to this assessed figure, not to market value, which is why the numbers on a tax bill often look far lower than a home's sale price.

Why is my home's assessed value lower than what I could sell it for?

In states with a statutory assessment ratio, assessed value is deliberately set below market value by law — for example, Georgia assesses at 40% of fair market value and South Carolina assesses an owner-occupied home at just 4%. The ratio doesn't reflect a lower opinion of the home's worth; it's simply the fraction of market value the state has chosen as the tax base. Other states, like Texas and North Carolina, assess at 100% of market value, so this gap doesn't exist there.

Does a homestead exemption reduce market value or assessed value?

A homestead exemption is almost always subtracted from assessed value, not market value. In a state with a 40% assessment ratio, like Georgia, a $2,000 exemption removes $2,000 from the already-reduced assessed figure — equivalent to about $5,000 of fair market value. That means the same dollar exemption amount can be worth more or less in real savings depending on the state's ratio and local tax rate, which is why comparing raw exemption amounts across states can be misleading.

Why is South Carolina's assessment ratio only 4%?

South Carolina classifies an owner-occupied legal residence for a special 4% assessment ratio under state law (S.C. Code Ann. § 12-43-220(c)), while non-owner-occupied residential property is assessed at 6%. The South Carolina Department of Revenue describes this directly as the "special 4% assessment ratio for your current, primary home." It is a classification benefit tied to owner-occupancy, not a reflection of lower property values, and it applies before any additional homestead or veteran exemptions are subtracted.

Is Illinois's Equalized Assessed Value (EAV) the same as market value?

No. Illinois exemptions reduce Equalized Assessed Value (EAV), which outside Cook County is roughly 33⅓% of a property's fair cash (market) value before the state equalization factor is applied; Cook County's residential class is assessed closer to 10% of market value. Because dollar savings equal the EAV reduction multiplied by the local tax rate, not the reduction amount itself, the same exemption produces different real savings in different Illinois taxing districts.

How can I find my property's actual assessed value and my state's assessment ratio?

Check your county assessor's or property appraiser's website, which typically publishes a property record showing both "assessed value" and "market," "appraised," or "fair cash" value side by side — the ratio between the two reveals your local assessment ratio. If you believe your assessed value is wrong relative to what the law allows, most states let you file a formal appeal with the assessor or a review board. Our calculator and methodology page explain how we apply these ratios to savings estimates.

Assessed Value vs. Market Value: Why Your Property Tax Bill Doesn't Match Your Home's Worth

By Sharon Ben-Moshe · July 2026

In many states, the "assessed value" used to calculate your property tax bill is not your home's market value — it's a fraction of it, set by a statutory assessment ratio that can run as low as 4% (South Carolina) or as high as 100% (Texas), which is why an exemption's face-value dollar amount rarely matches its real savings.

Assessed value is the figure your tax bill and exemptions are actually calculated on — it is not automatically the same as market (fair) value.
Some states apply a statutory assessment ratio: Georgia taxes 40% of market value, Ohio 35%, Illinois about 33⅓% (Cook County residential closer to 10%), Tennessee 25%, Colorado 6.8% for 2026, and South Carolina just 4% for an owner-occupied legal residence.
Texas and North Carolina assess at 100% of market value, and Florida, New York, Pennsylvania, Virginia, and Washington track market value directly through local assessment rather than a single statewide ratio.
Michigan and California use a different mechanism entirely: assessed or taxable value can lag market value because of caps tied to inflation or the purchase date, not a flat statewide ratio.
Because the ratio changes what an exemption dollar is worth, the same $10,000 exemption produces very different real savings in different states.

What Is "Assessed Value," and How Is It Different From Market Value?

Assessed value is the dollar figure a local assessor or state formula assigns to a property specifically for tax purposes. Market value — also called fair market value or appraised value — is what the home would likely sell for on the open market. In most states, assessed value equals market value multiplied by a statutory assessment ratio, a fixed percentage set by law, so the number on a tax bill can be far lower than what a buyer would actually pay for the house.

This distinction matters because property tax rates and most exemption dollar amounts are applied to assessed value, not market value. Confusing the two is a common reason homeowners misjudge what a homestead, senior, or veteran exemption is actually worth to them.

Why the Assessment Ratio Changes What Your Exemption Is Worth

Because exemptions are subtracted from assessed value, a fixed-dollar exemption is worth more "real" market value in a state with a low ratio than in a state with a high one. Georgia is a clean example: the state assesses property at 40% of fair market value, and its standard $2,000 homestead exemption is deducted from that 40%-assessed figure — which works out to roughly $5,000 of fair market value removed from the tax base, not $2,000.

Illinois works the same way but with an extra layer of terminology: exemptions there reduce a property's Equalized Assessed Value (EAV), not its fair market value directly. Outside Cook County, EAV runs about 33⅓% of market value before the state equalization factor is applied, so a $6,000 EAV reduction is a larger fair-market-value benefit than the raw number suggests. The actual dollar savings equal the EAV reduction multiplied by the local tax rate — never the reduction amount itself.

Assessment Ratios by State: The Fraction Behind Your Tax Bill

The ratio between assessed and market value is set by state law and varies widely. Here is how it works in the states with the most distinctive treatments:

Georgia — assessed at 40% of fair market value statewide (O.C.G.A. § 48-5-7). Homestead exemptions subtract from that 40%-assessed figure, so a $2,000 exemption is equivalent to about $5,000 of market value. See Georgia's homestead exemption for the program details.
Illinois — exemptions reduce Equalized Assessed Value (EAV), which outside Cook County runs about 33⅓% of market value; Cook County's residential class is assessed closer to 10% of market value before equalization. See Illinois's homestead exemption for how the state's General Homestead Exemption applies.
Ohio — taxable value is 35% of true (market) value. Homestead reductions for seniors and disabled homeowners are set in market-value dollar terms ($29,000 for tax year 2025) and then converted to the 35% assessed base.
South Carolina — an owner-occupied legal residence is assessed at just 4% of fair market value; non-owner-occupied residential property is assessed at 6%. See South Carolina's homestead-related exemptions for how the $50,000 Homestead Exemption stacks on top of the 4% classification.
Colorado — the 2026 residential assessment rate for local-government levies is 6.8% of actual value. The state's senior and disabled-veteran exemptions reduce actual value first (50% of the first $200,000), and only the reduced actual value is then multiplied by that assessment rate.
Tennessee — residential and farm property is assessed at 25% of appraised market value, though the state's Property Tax Relief and Property Tax Freeze programs are described in market-value dollar terms rather than assessed-value terms.
Michigan — State Equalized Value (SEV) is 50% of market value, but taxes are actually billed on a separate, capped Taxable Value that can rise no faster than the lesser of 5% or inflation each year under Proposal A — so Taxable Value often sits well below SEV, especially on longer-held homes.
Texas and North Carolina — both assess at 100% of market (appraised) value, so exemptions subtract directly from the full appraised figure with no ratio conversion needed. See Texas's homestead exemption for the current $140,000 school-tax exemption amount.
California — assessed value is also nominally at a 1.0 ratio, but under Proposition 13 that "assessed value" is an acquisition-value base tied to the purchase price (plus up to 2% growth per year), not current market value. That capping mechanism — distinct from a market-tracking ratio — is significant enough to warrant its own dedicated discussion, so this post covers it only briefly.
Florida, New York, Pennsylvania, Virginia, and Washington — none of these publishes one single statewide assessment ratio; assessed value is meant to track market value directly through local assessment (with a county-level common level ratio in some cases). Where a program in these states can't be tied to a published ratio, this site's estimate treats the ratio as 1.0 with a caveat, or shows eligibility information without a dollar estimate.

South Carolina's 4% Classification, Confirmed by the State

The South Carolina Department of Revenue describes the mechanism directly on its exempt property page: "Legal Residence refers to the special 4% assessment ratio for your current, primary home." Move out and rent the same house, and the assessment ratio for that property jumps to 6% — nearly doubling the assessed-value base your tax bill is calculated on, even though the home's market value hasn't changed at all.

Illinois's Equalized Assessed Value, in the State's Own Numbers

The Illinois Department of Revenue's own property tax relief guidance confirms the ratio in describing the Homestead Improvement Exemption's cap: an improvement exemption of up to "$25,000 in assessed value, which is 33 1/3 percent of fair cash value." In practice, that means a typical Illinois home's Equalized Assessed Value — the figure exemptions actually subtract from — is roughly one-third of its fair cash (market) value outside Cook County, and closer to one-tenth of market value for Cook County residential property, before the state equalization factor is layered on top.

Why This Matters for Your Exemption Savings Estimate

An exemption's advertised dollar amount is not the same thing as your real tax savings, because the two are separated by the assessment ratio and the local tax rate. Our methodology page walks through exactly how we convert a state's assessed-value exemption into a market-equivalent estimate for each verified state, and why some states render eligibility information without a dollar figure when no reliable ratio is published.

If you want to see this applied to your own address, our property tax exemption calculator uses each state's verified assessment ratio automatically. This matters even more once you start stacking multiple exemptions, since each additional exemption is subtracted from the same assessed-value base, not from market value.

What About States With Assessment Caps Instead of Ratios?

A handful of states, most notably California under Proposition 13, use a different mechanism: assessed value is frozen at (or near) the purchase price and allowed to grow only a small amount each year, regardless of what the home would sell for today. That produces the same symptom — assessed value drifting away from market value — through a completely different cause than a fixed statewide ratio. Because caps like Prop 13 raise their own set of questions about long-time owners versus recent buyers, that mechanism deserves its own detailed treatment rather than a brief mention here.

How to Find Your Home's Actual Assessed Value

Because the assessed-versus-market gap is set by law and varies by state (and sometimes by county), the only reliable way to know your own numbers is to check the source directly:

1. Look up your property record on your county assessor's or property appraiser's website — most publish a record showing "assessed value" alongside "market," "appraised," or "fair cash" value.
2. Divide the assessed value by the market value shown on that same record to see your effective local ratio, and compare it against your state's published statutory ratio, if one exists.
3. Confirm any exemption amount is described as a reduction to assessed value (the norm) rather than market value before estimating your savings.

4. If your assessed value looks wrong relative to what the ratio and market conditions should produce, most states allow a formal challenge — see our guide on how to appeal a property tax assessment for the process and deadlines.

This article explains a valuation mechanism, not legal or tax advice, and assessment ratios and caps can change from year to year — always confirm your county's current figures with your local assessor before making financial decisions. For the basics of how homestead exemptions work before the ratio is applied, see our homestead exemption guide. More on how this site sources and verifies its state-by-state data is on our About page.

Frequently asked questions

What does "assessed value" mean on a property tax bill?: Assessed value is the dollar figure a local assessor or state formula assigns to a property specifically for calculating property tax and exemption amounts. It is derived from market value but, in many states, equals only a fraction of it — set by a statutory assessment ratio — rather than matching what the home would actually sell for. Property tax rates and most exemption dollar amounts are applied to this assessed figure, not to market value, which is why the numbers on a tax bill often look far lower than a home's sale price.
Why is my home's assessed value lower than what I could sell it for?: In states with a statutory assessment ratio, assessed value is deliberately set below market value by law — for example, Georgia assesses at 40% of fair market value and South Carolina assesses an owner-occupied home at just 4%. The ratio doesn't reflect a lower opinion of the home's worth; it's simply the fraction of market value the state has chosen as the tax base. Other states, like Texas and North Carolina, assess at 100% of market value, so this gap doesn't exist there.
Does a homestead exemption reduce market value or assessed value?: A homestead exemption is almost always subtracted from assessed value, not market value. In a state with a 40% assessment ratio, like Georgia, a $2,000 exemption removes $2,000 from the already-reduced assessed figure — equivalent to about $5,000 of fair market value. That means the same dollar exemption amount can be worth more or less in real savings depending on the state's ratio and local tax rate, which is why comparing raw exemption amounts across states can be misleading.
Why is South Carolina's assessment ratio only 4%?: South Carolina classifies an owner-occupied legal residence for a special 4% assessment ratio under state law (S.C. Code Ann. § 12-43-220(c)), while non-owner-occupied residential property is assessed at 6%. The South Carolina Department of Revenue describes this directly as the "special 4% assessment ratio for your current, primary home." It is a classification benefit tied to owner-occupancy, not a reflection of lower property values, and it applies before any additional homestead or veteran exemptions are subtracted.
Is Illinois's Equalized Assessed Value (EAV) the same as market value?: No. Illinois exemptions reduce Equalized Assessed Value (EAV), which outside Cook County is roughly 33⅓% of a property's fair cash (market) value before the state equalization factor is applied; Cook County's residential class is assessed closer to 10% of market value. Because dollar savings equal the EAV reduction multiplied by the local tax rate, not the reduction amount itself, the same exemption produces different real savings in different Illinois taxing districts.
How can I find my property's actual assessed value and my state's assessment ratio?: Check your county assessor's or property appraiser's website, which typically publishes a property record showing both "assessed value" and "market," "appraised," or "fair cash" value side by side — the ratio between the two reveals your local assessment ratio. If you believe your assessed value is wrong relative to what the law allows, most states let you file a formal appeal with the assessor or a review board. Our calculator and methodology page explain how we apply these ratios to savings estimates.