Breaking down assessed value
The assessed value of the home is what the government uses to calculate property taxes. It is meant to be used regardless of the market value. Its usually 20%-40% lower than the market value. This is why prospective buyers won't get much attention putting in an offer near the tax assessed value.
The way the assessed value is determined by officials appointing an assessor or appraiser to determine a home's value. Rules differ county to county but the assessor typically compares similar homes in the area. Some counties will have an inspection done and a walk on the property. They look at aspects like curb appeal, square footage, surrounding properties, and near public services. It is not all done by hand, assessors are also aided by computers and data.
The assessed value is now calculated by multiplying the properties value by (Virginia's percentage) an average percentage of 89%. The percentage varies for districts. By state law Virginia is required to reassess every 2 years for homes.
After the assessed value is determined the assessor has to go through another calculator to determine the property taxes. Virginia's property taxes are calculated by multiplying the homes assessed value by its property tax rate. Virginia also taxes personal property such as boats and mobile homes. Personal property is taxed at market value.
Difference Between Market Value and Assessed Value
The assessed value is used to determine the property's taxes. The assessed value is usually much lower than the appraised value. The reason is to account for the countries changing real estate conditions. If you are a buyer, you should understand the bank will look at the fair market value not the assessed value when approving your mortgage.
How Do Property Taxes Work
The higher the assessed value of your home, the more you will pay in taxes. That is why most homeowners prefer the assessed value to be very low. If they try to have their assessed value changed, its usually in fact to have it lower.
Tips for all homeowners
To many people, a home is their largest asset. Many plan to use it as their retirement plan or make it their forever home. To make sure you are meeting your money saving goals, while living in your home, I would recommend speaking with a financial advisor. They are qualified to help you make a plan and keep you on track for your money needs.
While considering how much home you can afford, keep in mind the property taxes and insurance you will have to pay. To determine an estimated number of your taxes there are many property tax calculators out there.
