A property tax assessment and an appraisal are two different things. Your county assessor sets the assessed value for tax purposes, while a licensed appraiser determines market value for lending or sale. They use different methods, serve different purposes, and almost always produce different numbers.
Assessment vs. Appraisal
Assessment: Value determined by county assessor for property tax purposes.
Appraisal: Value determined by licensed appraiser for lending or other purposes.
They're different processes, by different people, for different reasons.
Property Tax Assessment
The county assessor's office assesses every property annually.
They use:
- Sales data (what recently sold)
- Market trends
- Property characteristics
- County-wide valuations
The assessed value is used to calculate property taxes:
Property Tax = Assessed Value × Tax Rate (usually ~1.25% in California)
Proposition 13 (California)
California has Prop 13, which limits property tax increases.
Key rules:
- When you buy, property is assessed at purchase price
- Each year, assessed value increases max 2%
- If property is reassessed (sale, major addition), it jumps to current market value
- Then it grows 2% annually again
Example:
- You buy home for $500K in 2010
- Assessed value: $500K
- Each year increases ~2% ($510K, $520K, etc.)
- By 2025, assessed value might be ~$660K
- But market value might be $850K
- You're taxed on $660K, not $850K
This is why some homes have low tax bases.
How Assessments Happen
County assessor reviews:
- Public sales records
- Permits (additions, renovations)
- Physical inspection (sometimes)
- Comparable sales
Assessments are typically annual updates based on sales data.
Appraisals vs. Assessments
For lending: Lender requires an appraisal (my job).
For property tax: County assessor determines assessment.
For legal disputes: Court-ordered appraisals.
For insurance: Insurance companies use different valuation.
Same property, four different values, four different purposes.
Challenging Your Assessment
If you believe your assessment is too high:
- Get a professional appraisal showing lower value
- File a formal appeal with the assessor's office
- Provide comparable sales data
- Attend appeal hearing (if required)
The assessor will review and potentially lower the assessment.
Cost: Your appraisal fee ($500-$700).
Potential savings: Could be $100-$200+/year in taxes for years to come.
Math: If appraisal saves you $5K in assessed value, that's ~$60/year tax savings. Your $600 appraisal pays for itself in 10 years.
My Experience
In 40+ years, I've seen cases where assessed values are clearly too high.
Homeowners often don't challenge them.
But many would benefit from a professional appraisal to document lower market value.
Increased Assessment Triggers
Your assessment jumps (reassess to current market value) when:
- You sell the property
- You make major improvements (addition, major remodel)
- The county updates assessments (rare)
If you renovate, file permits. The county will reassess.
Timing Your Remodel
Some homeowners delay permitted improvements to avoid reassessment.
This is a tax strategy some use.
But unpermitted work has risks (can't use space legally, creates liability, lowers appraisal).
It's a trade-off: Lower taxes vs. legal/safety issues.
Bottom Line
Assessment values are for property taxes.
Appraisal values are for lending.
They can be very different.
If your assessment seems high:
- Get an appraisal
- File an appeal
- Potentially save thousands in taxes
Don't assume your assessment is correct. You have the right to challenge it.
And a professional appraisal is your best evidence.