What Is the Difference Between Appraised Value and Tax-Assessed Value?

Appraised value is a professional market estimate used for the loan, while tax-assessed value is the county's taxable basis, which can be a fraction of market value. They serve different purposes and are set by different processes, so it is normal for them to differ.

The appraised value answers what the market would pay for the home today. The assessed value answers what the county uses to calculate your property taxes. Confusing the two leads to wrong assumptions about both your loan and your tax bill.

The two numbers can be dramatically different without anything being wrong: a county that has not reassessed in years will show an assessed value far below the current market, and that is a feature of how assessments work, not a mistake in either number.

An appraiser determines market value by inspecting the home and comparing it to recent sales of similar properties. The appraisal is ordered by the lender, follows standardized methodology, and reflects the market on the date of inspection. It is the value the lender uses to size your loan.

Because appraised value tracks the current market, it can rise and fall with market conditions. It is a snapshot of what a buyer would pay today for this specific home.

The appraisal is also the number that protects you from overpaying: when the appraisal comes in below the contract price, the lender only lends against the appraised value, which is why an appraisal gap is a real negotiation moment rather than a formality.

The county sets the assessed value for tax purposes, often at a percentage of market value or on its own schedule of reassessments. Pennsylvania counties vary in how often they reassess and how closely the assessed value tracks the market. In some counties, assessed values lag behind market values for years.

The assessed value is multiplied by the local tax rate to produce your bill. Because it can be a fraction of market value, a home that appraises for $400,000 may have an assessed value well below that, with a correspondingly lower tax bill based on the local ratio.

The assessment ratio is the key: some counties assess at full market value, others at a fraction, and the tax rate is set to work with that ratio, so comparing tax bills across counties without knowing each county's ratio will mislead you.

The difference matters because the two values drive different costs: the appraisal drives your loan, and the assessment drives your taxes. A low appraisal can create a financing gap, while a high assessment raises your tax bill. Each has its own remedy: an appraisal can be challenged with better comparables, and an assessment can be appealed to the county board.

Know both numbers for any home you consider. Your agent and lender provide the appraisal context, and the county records show the assessment, giving you the full picture of what the home will cost to buy and to own.

Before you make an offer, look up the tax history and the assessment, and ask the seller or the county records how the bill has moved over recent years. That tells you whether a reassessment or an appeal is likely in your future as the new owner.