I was asked this question the other day by a reader of my blog and I thought I would share it with you in case you had the same question. This person was going to list their home for sale and they wanted to know if they could use their tax assessment to come up with an asking price.
Tax assessments are not a good source of information to use when you are trying to come up with a list price. County tax 
assessors use different methodology when they assess your property because of the shear number of appraisals that they have to do. They use mass appraisal methods which does not take into consideration special features and updates of your home. In addition, the county sometimes have incorrect information regarding your homes square footage. If this is the case then the price per square foot that the county uses will be multiplied by the wrong living area, and this will cause the value of your home to be incorrect.
Something else that may cause the value to be off is the exclusion of recent improvements to your home. If the county information does not reflect recent improvements, for example if you finish off your basement into a recreation room or something similar, then the assessed value will be lower than it should. The only reliable way to get the correct square footage, and eventually the correct value, is to have it measured by an appraiser. The appraiser takes into consideration recent renovations and updates and considers the quality of construction of the home as well. Only by considering all of the features of the home, it’s correct square footage, and condition can you get a true estimate of its value. Have you compared the information the county has on your home with a recent appraisal? Was it correct? Leave me a comment below, I would like to hear from you.
If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.
Well said, Tom. I would definitely say the same thing to a California home owner. Proposition 13 in California locks in a property’s “base year” value, meaning an owner will pay taxes based upon the original year they made the purchase. Of course Prop 8 makes up for a decline in value to owners by offering a temporary decline in property taxes if the market goes down. But all things considered, property taxes here should reflect the worth of the house when it was purchased (plus 2% each year in many cases). In effect, the tax roll does not show current values, but a value in the past. Do you guys have a similar “base year” propsition in AL? I’m curious.
Our property taxes are calculated by multiplying the current millage rate by the assessed value (which is 10% of the fair market value). If someone buys a property and it is not a foreclosure then that purchased is considered in the assessment. The state does not use forclosure sales when assessing property values, however I think that is wrong because in some areas the foreclosures are the market. I am sure this is done because they do not want tax revenue to go down.