While sometimes the terms are used interchangeably, they are two very different things.
Each town does their own assessment of every property in the town. The rules about when and how they do it are not only outside the scope of this post, but also pretty boring.
Essentially, the town will use, or hire a contractor to use, a formula to assign a value to each property. That value could be the market value. Or it could be way off. Also, towns don’t re-assess each year, so even if the value was close-ish when the assessment occurred, it could be wildly out of date by now.
And then your property tax bill is based on that assessed value. Very generally, divide the town’s budget by the TOTAL of all the assessed property (the Grand List), and that’s the town’s tax rate. If the town’s budget was $10 million, and the total grand list assessed values was $300 million, then the tax rate would be 3.33%. If your property was assessed at $200,000, your tax bill would be $6667. The town could get the same $10 million by raising your assessed value to $250,000, and then lowering the tax rate. You’d still pay $6667.
Buying or selling property does not change the assessed value.
See, kind of dry.
To really know the market value (what could you sell it for, or what equity do you have), you want an appraisal.
An appraiser is a licensed professional in Vermont. They compare a subject property against past sales (comparables) and then make adjustments based on differences between the properties. There’s more to it than that, this is just a summary.
Want to know what your house is worth, without paying for an appraisal? Green Light Real Estate can provide an accurate market valuation, for free. Just call 802-225-6425 or email Info@GreenLightRealEstate.com
If your house has a new roof, it’s worth more than the exact same house with an old roof. If you have four bedrooms, and a comparable has three, then likewise, and adjustment has to be made.
In the end, the appraisal should accurately reflect the current value of your home. It’s much more reliable than the assessed value.
For buying a house, a bank will almost always require an appraisal. They don’t care at all about a town’s assessed value.
An appraisal has a shelf life. Since it only takes one more comparable sale to change the value, an appraisal from a year ago (or five) isn’t going to be accurate.
And, if you’re a chart person, here you go.
Want to know what your house is worth, without paying for an appraisal? Green Light Real Estate can provide an accurate market valuation, for free. Just call 802-225-6425 or email Info@GreenLightRealEstate.com.