Central Austin Real Estate – Tax Value vs Market Value

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From time to time I find myself explaining to Central Austin real estate buyers the difference between market value and the value that our taxing entity assess a property at.

Market Value

Market value is a moving target.  It refuses to be pinned down with any certainty and can change in an instant. Realtors, appraisers, investors, market pundits and others take their shots at determining and predicting market values. At the end of the day however its our buyers and sellers who determine market value. When they make a deal – that’s market value.

Travis County Assessed Value

Texas is one of a handful of states where what you paid for your property isn’t public information.  Our taxing entity does the best it can to determine a properties previous years market value but it’s hands are tied because…

  • It’s limited in resources and can’t visit each property.
  • They have to rely on what we call a shotgun appraisal process.
  • They have some limited access to the MLS but not complete.
  • Not all properties are sold through the MLS
  • Some people argue their tax assessment down while other do not

Mechanically it appears to me that TCAD assess values they can justify and if they are too high they expect the  tax payer to appeal.  Don’t know about you but veryone I know –  fair assessment or not –  thinks their taxes are too high! TCAD’s strategy would be effective if we all had the time, resources and motivation to review our taxes in depth and appeal as needed. What happens in practice from my view is an uneven distribution of tax burden with the weight resting on the shoulders of those who don’t appeal their taxes.  (sorry for getting off the topic of this post)

The bottom line difference between market value and assessed tax value is that Market Value is where buyers and sellers make a deal and assessed tax value is the taxing entity best guess of last years value.

The takeaway is if you are buying or selling in Central Austin – forget about the assessed tax value (other than having to pay taxes) and focus on market value.

to Central Austin Real Estate – Tax Value vs Market Value
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