Assessed Value vs. Appraised Value vs. Market Value: What's the Difference?

Every property owner eventually notices the same puzzle. The town says your home is worth one number, an appraiser says another, and the internet says a third. None of them agree — and none of them is "wrong." They are answers to three different questions, produced by different people, for different purposes, on different dates. Understanding the difference matters most exactly when money is on the line: a tax appeal, an estate, a divorce, a sale, or a loan.

What Is Assessed Value?

Assessed value is the number your city or town assigns to your property for one purpose only: calculating property taxes. In Massachusetts, assessors are required to value property at full and fair cash value as of January 1 of the prior fiscal year, using mass-appraisal models that value thousands of properties at once — the rules are laid out by the Massachusetts Division of Local Services. Mass appraisal is efficient, but it is statistical: no one walked through your kitchen. Renovations, deferred maintenance, and quirks of your specific lot are invisible to it. That is why assessed value routinely lags the market in rising years and overshoots in falling ones — and why abatement processes exist.

What Is Appraised Value?

Appraised value is a professional's supported opinion of your specific property's value, prepared by a licensed appraiser under USPAP, the profession's uniform standards. Unlike an assessment, an appraisal is individual: the appraiser inspects the property, selects and adjusts comparable sales, and documents the reasoning. It also carries an effective date — the value as of a specific day, which can even be in the past (estate work, for example, often requires the value on a date of death). Courts, lenders, and the IRS rely on appraisals precisely because the conclusion is supported and defensible, not generated by a model.

What About Market Value?

Market value is the price your property would actually command between a willing buyer and willing seller, neither under pressure, both reasonably informed. It is the thing an appraisal estimates — and the thing an online estimate imitates. Automated estimates have real uses, but they carry no inspection, no local judgment, and no accountability; the same algorithm that misses your renovated kitchen also misses the highway noise. The final sale price of your home is market value revealed; everything before that is an estimate of it, with very different levels of rigor.

When the Gaps Between Assessed Value and Appraised Value Matter

Most of the time the three numbers can disagree in peace. Four situations end the peace. Property tax appeals: if your assessed value looks high against what your home would actually sell for, an independent appraisal is the evidence an abatement application needs — assessors respond to documented value, not opinions. Estate and gift work: the IRS expects a qualified appraisal, not a printout of an online estimate, and the effective date rules matter. Divorce and buyouts: equitable distribution turns on defensible current value, and each side's "number" often starts far apart. Selling or refinancing: pricing off the assessment (or the algorithm) is how homes sit unsold — or leave money behind.

A useful rule of thumb: assessed value is for taxing you, appraised value is for defending a number, and market value is what the market finally says. Only one of the three comes with a professional's signature and reasoning attached.

Why Is Assessed Value So Often Different From Appraised Value?

Because the two numbers are built differently, on different dates, for different audiences. An assessment is a statistical estimate tied to a valuation date that may be eighteen months behind today's market — in a fast-moving New England town, that lag alone explains most of the gap. Assessments also smooth: a mass-appraisal model treats your house as a bundle of characteristics (square footage, beds, baths, neighborhood code), so two homes that look identical on paper get similar assessments even when one has a new roof and the other has a wet basement. An appraisal reverses every one of those tradeoffs — current market data, an individual inspection, and adjustments specific to your property. Neither method is broken; they are simply tools of different precision. Confusion only becomes costly when someone treats the blunt tool as the precise one — pricing a sale off the assessment, or challenging a tax bill armed with nothing but an online estimate.

The Bottom Line

Assessed value, appraised value, and market value are three answers to three different questions — a tax formula, a documented professional opinion, and a market outcome. When the stakes are low, ignore the differences. When the stakes are real — a tax bill that looks wrong, an estate to settle, a divorce, a sale — the appraised value is the number built to stand up to scrutiny.

Appraisals Unlimited has provided residential and commercial appraisals across New England since 1993, including tax abatement, estate, and divorce assignments. If you need a number you can defend, order an appraisal.