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Originally Posted by FFlank
I randomly looked at about twenty recently purchased homes on the Sumter County Tax Collector's website and in each instance, the assessed value (before any exemptions were applied) was way less than the sales price. When I look at the property tax estimator on the property appraiser's website, they just want you to enter the sales price. It seems that the property assessor sets an assessed value that is somewhere around 80 to 85% of the sales price for property tax purposes. I take this to be a good thing since it means we all pay a lesser amount, but I can't figure out WHY this is the case. Does anyone know of any statute or rule that causes this to happen? I know that I can use the estimator but it just seems that this will give me an artificially high number, and the appraiser will likely change it downward to some amount after the purchase. I'm not considering the homestead exemption or any of the other statutory exemptions. This seems to be an across the board phenomenon before any exemptions are applied. My thanks to anyone who has the answer to this.
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It could be because you are looking at recently purchased homes. The market value might be based on the recent sale while the assessed value might be based on an assessment performed last year. If that is the case then the assessed value will catch up to the market value when the home is reassessed this year.
For my home, purchased several years ago, the assessed value and market value were the same last year but this year the assessed value is about 80% of market value. For my home, this is due to the Save Our Homes benefit which limits the increase in assessed value. This shows that assessed values follow market values and that market values increased significantly since last year.
Take a look at homes purchase a little over 13 months ago and see if the market values and assessed values aren't closer in those.