The formula to calculate the Assessed Value (AV), Market Value (MV), or Assessment Ratio (AR) is:
\[ AV = \frac{MV \times AR}{100} \]
Where:
The assessed value of a property is the dollar value assigned to a property by a public tax assessor for the purposes of taxation. This value is often a percentage of the market value of the property and is used to calculate property taxes. The assessment ratio is the percentage of the market value that is used to determine the assessed value. The market value is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction.
Let's assume the following values:
Using the formula to calculate the Assessed Value:
\[ AV = \frac{500,000 \times 80}{100} = 400,000 \text{ dollars} \]
The Assessed Value is $400,000.
