On average, how much difference is there between the fair market value of a house versus the county assessed?

Question

the county has assessed my house for property tax at $175,000. Up from $161,000 last year. What do you think the fair market value of this house should be compared to the county assessed property tax value?

Answer 1

That depends on where you live. In California, the county does not reassess a property unless it is sold or remodeled (permitted remodel). So, someone who bought their house 30 years ago for $100K might have a house now worth several hundred thousand dollars. But, their tax basis is still on that $100K purchase price.

If they sold the house for, say, $700K, the new owner now owes on a tax basis of $700K.

If they remodeled the house and added on to it, the county would look at the amount of square footage and number of rooms, include cosmetic improvements (specialty flooring, new kitchen cabinets, etc), and come up with an increase in value based on the amount of work done.

So, I'm assuming you live somewhere where they county reassesses property each year for tax purposes. If you didn't do any kind of remodeling to the house or anything that would improve its value, the assessment should have gone down, because real estate prices have been dropping about 10% a year on average for the last 3 years.

Answer 2

There is no average.  It varies drastically my neighborhood, even within the same city.

For example, I live in Charlotte, NC which is a decent sized city.

In the newer communities, the assessed value and the market values are very close...about 15% off.

In the older neighborhoods, it is not uncommon to see a market value of over $1 Million with an assessed value of only abut $350K.

There is NO relation between market and assessed value.