What's the difference between market, assessed, and taxable value?

These three numbers describe the same house at different stages of the property tax calculation, and confusing them is the most common reason homeowners misjudge whether to appeal.

1. Market value — what a buyer would pay. This is the open-market sale price. The Texas Comptroller defines it as "the price at which a property would transfer for cash or its equivalent under prevailing market conditions" (Tex. Tax Code §23.01), with neither buyer nor seller under pressure. Assessors estimate market value as of a fixed lien date — January 1 in Texas and many other states.

2. Assessed value — the assessor's figure for tax purposes. In some states this equals market value; in others it is a fixed percentage of market value (the "level of assessment" or assessment ratio). The New York State Department of Taxation and Finance explains that properties "are required to be assessed at a uniform percentage of market value each year" — so a $200,000 home assessed at 30% has a $60,000 assessment. To compare a comp's sale price to your assessment in a fractional-assessment state, convert: implied market value = assessed value ÷ ratio.

3. Taxable value — what you're actually taxed on. Taxable value is the assessed value minus any assessment caps and exemptions. Texas, for example, caps a homestead's taxable value increase at 10% per year (Tex. Tax Code §23.23) and subtracts homestead, senior, and veteran exemptions before applying the rate. Your tax bill = taxable value × tax (millage) rate.

Why this matters for an appeal. You generally appeal the market/assessed value the assessor placed on your home — not the taxable value, and not the tax rate (which is set by local taxing units). If a cap already holds your taxable value well below market value, an appeal of market value may not lower your bill at all that year. Always read your notice to see which figure rose and by how much before deciding to file.