What is the Difference Between a Valuation and an Assessment?
Individuals researching the current real estate market may wonder about the differences between a valuation and an assessment. In short, a valuation is a paid service for a professionally written report of the property, and an assessment is a service conducted by local officials to calculate and determine the property’s official tax rates.
A property valuation may need to be conducted due to a wide variety of reasons, including property settlements, refinancing or financing a property, and dispute resolution. During a property valuation, a valuer will not review and compare the properties against others on the market. An expert valuer will review a wide variety of the properties aspects, including the following:
- Any restrictions on planning
- The property’s physical location
- The structures of any buildings on the property
- The properties zoning
- The condition and size of any buildings on the property
A property assessment is largely based on the property’s market value and used to determine the proper tax rates of a property. Property assessments should be conducted on a basis of every one to three years depending on the individual properties. A low property assessment indicates a homeowner paying less in tax, and a high assessment indicates a homeowner paying more in tax. An assessor will review various aspects of a property to come to a determination, including the following:
- If the property has been through any repairs or improvements recently
- Comparisons of the current property against other similar properties
- Determine the properties cost of replacement if needed