What determines the assessed value of a property?

The assessed value of a property is primarily determined by the current market value, which reflects the amount for which the property would likely sell in an open and competitive market. This valuation process often involves a methodical analysis of various factors, such as the property’s characteristics, the sales prices of similar properties in the area, and overall market trends. The current market value serves as a benchmark because it incorporates recent sales data and reflects the most accurate and relevant information available at the time of assessment.

In contrast, other options do not represent a valid basis for determining assessed value. The historical price of the property may contribute to understanding the property’s valuation journey but does not provide an up-to-date reflection of its worth in the current market. The value set by the property owner might be subjective and often does not align with market realities. Lastly, a flat rate determined by the municipality may be part of local taxation practices but does not accurately represent the individualized assessment of a property’s value based on its current state and market conditions. Thus, the current market value is crucial for establishing an equitable and justifiable assessed value for taxation purposes.