Did My Home Just Lose Value? – Understanding the Assessed Value

Did My Home Just Lose Value? - Understanding the Assessed Value
Did My Home Just Lose Value? - Understanding the Assessed Value

Each year the Pima County Assessor sends out the annual tax statement.  For those with a mortgage on the home, the loan servicer typically collects the property taxes on a monthly basis and pays them when due to the county.   So even if you receive a tax statement, you may not need to pay it.  A sample of what that form looks like if the lender is making the payments, can be found on the county’s website. Notice the top indicates.

We typically receive a handful of calls every year regarding the value assigned by the assessor.  It is always less than what a buyer may have just paid for the home or what an appraiser’s opinion may have been just a few months before.   Here are some basic tips to help with this.   The assessed value of a property is done through a calculation with the sole purpose of setting the amount of taxes levied.  The process involves actual market data, complex algorithms, and I am pretty sure, some wizardry.  

There are three value terms which create some of the confusion.

  • Market Value is determined by what other homes are selling for- the price a buyer is willing to pay to a willing seller. 
  • Appraised Value is determined by a licensed appraiser and is typically done to support the value of the collateral for a mortgage
  • Assessed Value is determined by a process defined by Arizona Statute   

When buying a home, the market value is what you would rely on.  If you needed a home loan, the lender would require an appraised value.  Typically, these are similar figures, but they can be different, based on opinions and appraiser guidelines.   

To complicate matters the tax statement refers to a “Full Cash Value” (FCV), which seems to indicate something like a Market Value.   However, the FCV of a home is based on market data from January 1 of the previous year.   So the 2019 Assessments coming out now, are based on the FCV from January 1 of 2018.  Fourteen months ago, based on market data with no physical inspection of your home, value was determined.   

If you have questions regarding your taxes, you can call the assessor at (520) 724-8630.

The moral of this story is: the County doesn’t determine your home’s market value, the market does.