Home Appraisal vs Assessment: What's the Difference?

Your home has at least two "official" values—and they're probably different numbers. Understanding the difference between a home appraisal and a property tax assessment helps you know which matters for what, and can potentially save you money.

Here's what each valuation means and why they rarely match.

What Is a Home Appraisal?

A home appraisal is a professional estimate of your home's current market value, performed by a licensed appraiser.

Purpose

Appraisals are used for financial transactions:

• Getting a mortgage
• Refinancing
• Applying for a HELOC
• Selling (sometimes)
• Estate settlements
• Divorce proceedings

Who Does It

Licensed appraisers with specific training and state certification. They're independent third parties, not employed by the buyer, seller, or lender.

How It's Done

The appraiser:

1. Visits your home (for full appraisals)
2. Measures square footage and assesses condition
3. Notes features, upgrades, and deficiencies
4. Researches recent sales of comparable homes
5. Adjusts for differences between your home and comps
6. Arrives at a market value opinion

Cost

$400-$600 for a full appraisal. You typically pay this fee upfront when getting a mortgage, refinancing, or applying for a HELOC.

Validity Period

Appraisals are considered current for 3-6 months, depending on the lender. After that, values may have changed enough to require a new appraisal.

Desktop vs Full Appraisal

Some lenders allow "desktop appraisals" that use data and photos without a physical visit. These are faster and cheaper but less thorough.

What Is a Property Tax Assessment?

A property tax assessment is your local government's valuation of your property for the purpose of calculating property taxes.

Purpose

One purpose only: determining your property tax bill.

Your tax bill = Assessed Value × Tax Rate (mill rate)

Who Does It

Your county or municipal tax assessor's office—government employees, not independent appraisers.

How It's Done

Assessors use mass appraisal techniques to value many properties at once:

• Property records (square footage, bedrooms, bathrooms)
• Sales data in the area
• Cost and depreciation models
• Sometimes exterior inspections (interior rarely)

They typically don't visit every home individually or account for interior condition and upgrades.

Cost

Nothing to you—funded by your tax dollars.

Update Frequency

Varies by location:

• Annual: Some states reassess every year
• Every 2-3 years: Common in many areas
• Infrequently: Some jurisdictions go 5-10+ years between full reassessments

Side-by-Side Comparison

Why They're Usually Different Numbers

Your appraisal and assessment will almost never match. Here's why that's normal:

Assessment Ratios

Many states assess properties at a percentage of market value, not full market value.

Example:

• Market value: $500,000
• Assessment ratio: 80%
• Assessed value: $400,000

If your area uses an 80% ratio, an assessed value of $400,000 means your market value is approximately $500,000.

Assessment ratios vary dramatically:

• Some states assess at 100% of market value
• Others use 10-15% (like Louisiana)
• Most fall somewhere between

Timing Differences

Appraisals reflect current market conditions. Assessments may reflect conditions from 6 months to several years ago, depending on when the last reassessment occurred.

In rapidly appreciating markets, your assessment often trails your actual market value significantly.

Different Methodologies

Appraisers visit your home, see your renovations, and make subjective judgments about condition and appeal. Assessors use mass techniques that can't account for:

• Interior improvements
• Deferred maintenance
• Landscaping quality
• Upgrades to kitchens and bathrooms

Two identical houses on paper might have very different actual values based on condition—something assessors typically miss.

Which One Matters for HELOCs?

The appraisal—absolutely.

Lenders don't care about your tax assessment. They need to know the actual market value of their collateral. That requires an appraisal (or at least a modern automated valuation model).

When you apply for a HELOC, the lender will either:

• Order a full appraisal
• Use a desktop appraisal
• Accept an automated valuation (AVM) for lower-risk applications

Your property tax assessment has zero bearing on your HELOC eligibility or credit limit.

Can I Use My Assessment for a HELOC?

No. Even if your assessment happens to be close to market value, lenders won't accept it. They need valuations using their approved methods.

Some homeowners think a high assessment helps their HELOC application. It doesn't. Only the lender-ordered valuation counts.

What If Your Assessment Seems Wrong?

If your property tax assessment is too high, you're paying more taxes than you should. You can appeal.

Signs Your Assessment May Be Too High

• It's higher than recent sales of similar homes
• It doesn't reflect damage or negative factors
• Comparable properties have lower assessments
• The square footage or details are wrong

How to Appeal Your Property Tax Assessment

Step 1: Understand the deadline Most jurisdictions have strict appeal deadlines—often 30-90 days after you receive your assessment notice. Miss it and you wait until next year.

Step 2: Gather evidence

• Recent sales of comparable homes (lower than your assessment)
• Photos of property issues the assessor missed
• Proof of incorrect property details
• Previous appraisals (if recent)

Step 3: File the appeal Contact your assessor's office for the appeals process. It usually involves:

• Written appeal with documentation
• Informal hearing with the assessor
• Formal hearing with an appeals board (if needed)

Step 4: Attend hearings Present your evidence. Be factual, not emotional. Show comparables and explain why your assessment is too high.

Is Appealing Worth It?

Do the math:

• Current assessment: $400,000
• You believe it should be: $350,000
• Reduction: $50,000
• Tax rate: 2%
• Annual savings: $1,000

If you can save $1,000/year by spending a few hours gathering evidence and attending a hearing, it's usually worth the effort.

What If Your Assessment Is Lower Than Market Value?

This is actually common and generally works in your favor—lower taxes.

Should you tell the assessor? No obligation to, and no reason to volunteer information that increases your taxes.

Be careful with permits: If you do major renovations and pull permits, the assessor will likely find out and increase your assessment accordingly. This is legal and expected—improved properties are worth more.

Frequently Asked Questions

Can my assessment be higher than my appraisal?

Yes, though it's less common. This usually happens when:

• Markets declined after the last assessment
• The assessor overvalued your property
• Your home has issues the assessor doesn't know about

If this happens, you have strong grounds for an appeal.

Why is my assessment so much lower than my home's value?

Likely due to:

• Assessment ratio (your state may assess below market value)
• Timing (assessments lag markets)
• They haven't seen your improvements

This works in your favor for taxes. Don't complain.

Do appraisers use tax assessments?

Appraisers may look at assessment data for property details (square footage, lot size), but they don't use assessed values as a basis for market value. They rely on comparable sales.

How do I find my property assessment?

• Check your property tax bill
• Visit your county assessor's website
• Call the assessor's office

Most jurisdictions have online property search tools where you can look up any property's assessed value.

Will a low assessment hurt my HELOC application?

No. Lenders ignore assessments. They use their own appraisal or valuation methods. A low assessment might actually be great—you pay less in taxes while your actual equity (based on market value) remains high.

The Bottom Line

Home appraisals and property assessments serve completely different purposes:

• Appraisal: What your home is worth on the market. Matters for HELOCs, mortgages, and selling.
• Assessment: What your local government thinks it's worth for tax purposes. Matters only for property taxes.

Don't expect them to match—they rarely do. Use appraisals for financial decisions and assessments for tax planning.

If your assessment seems too high, appeal it. If it's below market value, enjoy the tax savings.

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Ready for a real market valuation? Start your HELOC application and see what your home equity can do for you.