KO Appraisal
Assessed value vs market value
Assessed value is the figure your county uses to calculate property tax. Market value is what the property would sell for. In most states these track each other loosely. In California they can diverge enormously and legitimately, because Proposition 13 ties assessment to when you bought rather than to what the property is worth now.
How California assessment actually works
Under Proposition 13, a property’s assessed value is set at its market value when acquired, the base year value, and then increases by an inflation factor capped at 2% per year. It is not re-set to market value annually. A change in ownership or new construction generally triggers reassessment to current market value, establishing a new base year.
The consequence is that two identical houses side by side can carry very different assessments and very different tax bills, based purely on when each last changed hands. A long-held property is frequently assessed far below what it would sell for, and that gap is the system working as designed, not an error.
Which direction the gap runs, and why it matters
Because assessment is anchored to purchase and rises at a capped rate, assessed value usually sits below market value in a market that has appreciated since you bought. That is not something to correct: it is the benefit of the base year rule.
The gap becomes a problem when it runs the other way. If values fall after you buy, your assessment can exceed what the property is now worth, and you are paying tax on value that no longer exists. Proposition 8 addresses exactly this: it provides for a temporary reduction where current market value has fallen below the factored base year value. The reduction is reviewed annually and the assessment can be restored as values recover, but never above the factored base year value.
What an appraisal does that a tax bill cannot
Assessed value should never be used as evidence of market value, in either direction. It is a tax computation with a statutory formula behind it, produced without an inspection and generally without any knowledge of the property’s actual condition.
- It reflects a base year that may be decades old, factored forward mechanically.
- It is produced through mass appraisal, statistical valuation across whole neighbourhoods, not individual analysis of your property.
- It cannot see condition, deferred maintenance, an unpermitted addition, or a functional problem with the layout.
- It has no bearing on what a lender will lend against, what a buyer will pay, or what a court or the IRS will accept.
When the assessment is genuinely wrong
An assessment can be challenged through the county assessment appeals board. The grounds that succeed are factual: the assessor’s record overstates square footage or improvements, the property’s condition is materially worse than assumed, or, under Proposition 8: current market value has fallen below the factored base year value.
What an appeal requires is evidence of market value as of the relevant valuation date, which is what an independent appraisal supplies. Filing windows are set by statute and are strict; the current dates for your county should be confirmed with the clerk of the board before relying on them, since they can shift when a deadline falls on a weekend or holiday.
Common questions
Which is higher, assessed value or appraised value?
How do I find the assessed value of my property?
Should I appeal my property tax assessment?
Does an appraisal lower my property taxes?
Does a home improvement raise my assessment?
Related reading
Next step
Tell me about the property.
Most assignments start with a short call, property type, the purpose of the appraisal, and the deadline you are working against. You get a fixed quote before any engagement, never contingent on the value reached.
Typical commercial fees range $2,000–$4,000. Residential and simpler assignments quote lower. Every engagement is quoted in advance, so the figure is known before work begins.