Why are my Tax Values so Low?

This is definitely a good question to ask. Homeowners sometimes are confused by the price that a Tax Appraiser gives your home. The answer to this question is much more simple that most would think, your tax value usually does not reflect the Market Value of your home.

Tax Value vs Market Value

To understand these two values, you first have to define the word: Value. The third definition according to Websters: relative worth, utility, or importance a good value at the price.

This definition fits the "utility" of this article well. The Market Value is used by Brokers and Appraisers to have an idea of what the home is worth. This is the utility of the sale and transfer for a deed (A.K.A. a property). However, the utility of the Tax Value is quite different. This value is used for the price that the homeowner will pay the Taxing Entity. This Taxing Entity can be an Independent School District, a County Government or even a Community College. The Appraisal District of the area dictates this Value, and therefore the entities' interest is to collect what is owed to them. But see, Value is usually an opinion. Even the Market Value is an opinion of professionals at the time of sale.

Interests

The interest for you as a homeowner is to lower the value of the home according to the Appraisal District. This is why there is a "protest process" in your corresponding Appraisal District. This is why real estate professionals will usually tell you not to judge the Market Value of a home with the Tax Value. The difference between both does vary depending on location.

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Hope this helps!

Will Puente, MBA

Real Estate Broker