Tax Appraisal vs Market Value: Why Your Biggest Fear About Resale Value Isn’t True

Here’s what you need to know about your tax appraisal vs market value when it comes to protesting property taxes and selling your home:

• Many homeowners mistakenly believe protesting their tax-appraised value will lower their home’s resale value.
• Resale value is mostly determined by buyers and market conditions, while tax appraisal value is used for tax purposes.
• Lowering your tax-assessed value reduces your tax bill without lowering your home’s value in the eyes of buyers.
• Protesting your tax-assessed value can save you money and give peace of mind by ensuring you pay only your fair share of taxes.

Myth: Protesting My Tax Appraisal Will Lower My Resale Value

Many property owners hesitate to protest high tax-appraised values for fear that it will lower their home’s resale value. This misunderstanding can lead to unnecessary overpayment of property taxes.

Let’s dig deeper to understand why this is not true.

What Is the Tax Appraisal vs Market Value?

Market value, or resale value, is the price a buyer is willing to pay on the open market. This value is influenced by many factors beyond tax appraisal, such as location, condition, upgrades, neighborhood trends, and comparable sales.

Tax appraisal value (or tax-assessed value), on the other hand, is the value assigned by the county appraisal district for tax purposes. While most counties consider similar factors to those used in resale value, they mostly rely on mass appraisal methods that can miss these specifics. These two values serve different purposes and are determined using different methods.

For a clear explanation of this distinction from our founder, Richie Gill, watch this video.

Why Lowering Your Tax Appraisal Value Doesn’t Lower Your Resale Value

The county appraisal is primarily for taxation; it doesn’t dictate market demand or buyer perceptions. Buyers look at comparable sales, neighborhood trends, home condition, and other market factors, not just the tax appraisal. A lower tax bill can actually make your property more attractive to buyers. 

It’s important to note that properties are typically reappraised by the county annually for tax purposes. The value is assessed as of January 1st of that tax year. Property taxes often increase after a purchase due to the effect of market value on the tax assessment. The point is, your tax appraisal value won’t automatically lower your resale value.

What Is a Fee Appraisal Value?

There’s actually a third value that comes into play when selling your home: the fee appraisal value. When a buyer is working with a lender, the bank won’t underwrite the property based on its tax appraisal value, since that’s based on a mass appraisal system. They will send a fee appraiser to assess the property and ensure it appraises for at least the purchase price before providing the mortgage. A fee appraisal does not set the resale value; it is an indicator of fair marketplace value to the bank.

How Protesting Your Property Tax Can Save You Money Without Risking Resale Value

So, bottom line, what do you need to know about tax appraisal vs market value? Protesting your tax-assessed value corrects overvaluations that result in higher taxes than the fair market value warrants. When your assessed value is lowered, your property tax bill decreases, freeing up more disposable income and reducing financial strain.

In some cases, it can improve the perception of your home’s affordability and marketability, benefiting both current owners and future buyers. Beyond the financial savings, protesting offers peace of mind knowing you are paying only your fair share—not more.

Don’t let misconceptions about tax appraisals and resale value cost you thousands of dollars each year. Review your property’s value assigned by the county carefully and consider protesting if you believe your home is overvalued.

Contact Gill, Denson & Company for expert help to protect your money and your property’s worth. We’ll guide you through the protest process so you can save on property taxes without worrying about your home’s resale value.