What is the difference between Assessed property Value, and Fair market value for property?
Assessment is used along with tax rate to determine property taxes. But how assessment relates to fair market value can vary widely depending upon what is customary for the location of the property. I have woods in Wisconsin that had been zoned agricultural and was assessed based on crop value. However, then they changed the rules and since I do not farm for a living, it is now assessed as unimproved land and resulting higher property taxes. Tax increased 1700% from one year to the next (from $22 to $375). My home in an Illinois county is assessed at 1/3rd of its fair market value minus $5000 homestead exemption (equivalent to $15,000 off of its fair value). An adjacent county assesses homes at 16% of their value, but businesses at a higher rate, and has higher sales tax. So to tell if your assessment is fair or not, you need to know if or how that relates to actual value, or something totally different (like possibly crop value in a rural area).
