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Assessments vs Appraisals

Written by Tax Clarion on . Posted in General Information.

The assessed value and appraised value of a property are two different concepts used for distinct purposes in real estate, though they are often confused. Here’s how they differ:

  • Assessed Value
    • Purpose: Used primarily for property tax purposes.
    • Who Determines It: The Clarion County Tax Assessor office determines the assessed value. Most recently a firm, Vision Government Solutions, was hired for the county wide reassessment.
    • How It’s Calculated: The calculation is based on a formula or set criteria established by the county, which could take into account factors like property size, market trends, improvements, and the location of the property. In some cases, the assessed value may be a percentage of the appraised or market value.
    • Frequency: It’s typically determined periodically (e.g., annually or every few years) by the local taxing authority.
    • Relation to Taxes: Property taxes are calculated based on the assessed value. For example, if a property is assessed at $200,000 and the tax rate is 1%, the annual property tax would be $2,000.
  • Appraised Value
    • Purpose: Used to estimate the current market value of a property.
    • Who Determines It: A licensed or certified real estate appraiser determines the appraised value.
    • How It’s Calculated: The appraiser evaluates the property based on its condition, location, size, recent sales of comparable properties in the area, and other relevant factors. This gives an estimate of what the property would likely sell for on the open market.
    • Frequency: It’s typically done when buying, selling, or refinancing a property.
    • Relation to Market: The appraised value represents the current market value and is used by buyers, sellers, and lenders to make informed decisions about the property.

Key Differences:
Assessed Value is primarily for taxation purposes and may not reflect the property’s current market value.
Appraised Value is a reflection of the property’s market value and is used in transactions like buying, selling, or refinancing.

In many cases, the assessed value is lower than the appraised value because local governments may assess properties at a fraction of their market value for tax purposes. However, we have heard time and time again, "If my home would sell for what it was assessed at, I would sell in a heartbeat!". As of 1/19/25, we have requested the formulas used in the assessments to help understand why prices or seemingly high. Stay tuned!