What is the difference between market value and assessed value?

Market value refers to the price that a property would reasonably sell for in an open and competitive real estate market, given adequate time for exposure and marketing. It reflects the collective opinion of buyers and sellers about a property's worth based on factors such as location, condition, and market trends. This value can fluctuate based on current market conditions and buyer demand.

In contrast, assessed value is a value determined by a local government for the purpose of levying property taxes. It is typically a percentage of the market value and can vary depending on local assessment practices, policies, and regulations. The assessed value is not necessarily reflective of the price the property would fetch in the current market, as it may be set based on historical data or other methodologies.

Recognizing this distinction is crucial for understanding how property taxation functions and how property values are determined in a jurisdiction. The other options either misstate the relationship between market and assessed values or inaccurately describe the processes involved in determining assessed value.