The Battle of Property Values: Tax Assessed vs. Market Value – What Property Owners Must Consider

Mar 13, 2024

As a property owner, the county assigns a value to your property­čĆá, which can significantly impact your tax liability­čĺ░, potentially saving or costing you thousands of dollars. This value is known as the county’s property tax-assessed value. But is this assessed value equivalent to market value?

Your county determines the assessed value of your property through an evaluation of both the sales history of surrounding properties and any upgrades made to your property. While counties employ modern tools to approximate market value, it’s important to note that assessed value is not the same as market value. Market value is determined by a licensed appraiser who considers various factors, including comparable sales, replacement costs, and income approaches, ultimately reflecting what a buyer would be willing to pay for the property­čĺŞ.

Nationwide, counties typically assess property taxes at a rate ranging from 10% to 20% of fair market value, as reported by Forbes.com. In Northwest Arkansas, specifically Benton and Washington counties, properties are taxed at 20% of the assessed value. 

For Example:

$300,000 / 20%= $60,000

$60,000 /1000 = 60

60 x 57.95 (or your millage rate) = $3,477

Both Washington and Benton counties conduct reappraisals every four years. Washington’s reappraisal will take effect in October 2024, while Benton’s will follow in October 2025. Given the area’s rising property values, property owners in both counties should anticipate significant increases.

Amendment 79 of the State Constitution, offers several benefits to mitigate the impact of property value increases, including a 5% cap on annual increases for homestead properties and a freeze on taxable value for individuals aged 65 and older or those with disabilities.

How does the assessed value compare to market value? NWALook recently analyzed five properties sold within the past seven days in Washington County, revealing that assessed values were undervalued by 5% to 36%, with only one property’s assessed value exceeding the market value by 4%.

If you suspect that your tax-assessed value surpasses the market value, consider reaching out to a local Realtor for a comparable market analysis or an appraiser for a professional appraisal. Additionally, you can appeal the value of your property directly with your county.

For further information or to appeal your property’s assessed value, visit the following county websites: