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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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Government property appraisers have a different mission than ordinary real estate appraisers. Since it is the government, they are expected to strictly follow principles of fairness, equity, and so on. Overall, government property tax officials must also be practical because their work and outcomes are part of politics with reelections for property appraisers and avoidance of mass outrage of citizens complaining about their assessed property values for paying taxes. Put simply, few citizens complain if their tax assessed property values are less than what their neighbor’s house sold for.
The activity that government property appraisers do is called ‘mass appraisal’. For ordinary residential properties, mass appraisals almost certainly use computers, statistics, and sophisticated valuation models to annually assign assessed values to thousands of homes with relatively little human intervention. Ordinary real estate appraisers generally don’t do any of that and instead look at the sales prices of several homes in your neighborhood and make some adjustments for different characteristics such as swimming pools and renovations.
If you think this is in the weeds, you might look over the document at the link below that describes professional standards for mass appraisals that government property appraisal do. It is quite technical.
https://www.iaao.org/media/standards...sAppraisal.pdf