Market Value vs Assessed Value – Critical Differences Every Property Owner Must Know

Are You Overpaying on Your Property Taxes?

Did you know that the price your home could fetch on the market is often much higher than what the government uses to calculate your property tax?

Many property owners in Chennai and across major cities unknowingly pay higher taxes simply because they confuse market value with assessed value.

In this guide, you’ll learn:

What market value and assessed value really mean
How each is calculated and why they differ
Tips to check your property’s value and avoid overpaying taxes

By the end, you’ll understand how to make smarter property decisions, whether buying, selling, or managing your home.

What is Market Value? (The “For Sale” Price)

Market Value, also called Fair Market Value, is the price your property is most likely to sell for on the open market. It’s influenced by demand and supply, the economy, and the property’s features.

Example:

A 2-bedroom flat in Adyar, Chennai, might have recent sales in the range of ₹90–95 lakh. Depending on its condition, its market value could be around ₹92 lakh.

Factors Affecting Market Value

Location & Connectivity: Close to schools, hospitals, metro stations, and IT hubs
Property Condition & Age: New or renovated homes command higher prices
Supply and Demand: High demand with limited supply pushes prices up
Amenities: Security, gym, swimming pool, covered parking, and power backup
Economic Climate: RBI interest rates, employment stability, and market trends
Future Development: Upcoming metro lines, airports, or business parks

What is Assessed Value? (The “Tax” Price)

Assessed Value is determined by local authorities (municipal corporations) to calculate property tax. Unlike market value, it usually does not reflect the true selling price.

In India, assessed values are often linked to government benchmarks:

Guideline Value – Tamil Nadu
Circle Rate – Delhi, Noida, North India
Ready Reckoner Rate – Maharashtra

Example:

The same ₹92 lakh flat in Adyar may have an assessed value of ₹60 lakh. Your property tax is calculated on this ₹60 lakh, not the ₹92 lakh market value.

Factors Affecting Assessed Value

Government Benchmarks: Minimum value set by the state government
Assessment Ratio: Applied by the municipality to calculate the final value
Property Characteristics: Size, age, construction type, usage (residential/commercial)
Property Improvements: Renovations or extensions can trigger reassessment

Key Differences: Market Value vs. Assessed Value

How to Find Your Property’s Value

Finding Market Value

Comparative Market Analysis (CMA): Check recent sales of similar properties
Property Portals: See current asking prices on sites like MaadiVeedu.com
Professional Valuer: Hire a certified appraiser for official valuation (needed for bank loans)

Finding Assessed Value

Property Tax Bill: Check your latest receipt
Municipal Website: Chennai, Bengaluru, and Mumbai provide online access
Local Registrar’s Office: Look up Guideline/Circle/Ready Reckoner rates

Read also: Difference Between Market Value and Guideline Value in Tamil Nadu – What Every Buyer Must Know in 2025

Can You Challenge Your Assessed Value?

Yes. If you feel your property’s assessed value is too high, you can appeal. A lower assessed value means lower taxes.

Steps to Appeal:

Review your tax record for errors (size, rooms, etc.)
Gather evidence: Compare assessed values of similar properties
File an appeal with your municipal office during the designated period

Conclusion – Two Values, Two Vital Roles

Market Value determines your property’s worth in the market
Assessed Value decides how much property tax you pay

A high market value is great if you’re selling. A low assessed value is better for your annual tax bill. Understanding both empowers you to make smarter decisions about buying, selling, or managing your home.

Check your property’s current market and assessed value today at www.MaadiVeedu.com and learn more insights at blog.maadiveedu.com.

Frequently Asked Questions (FAQ)

1: What is the difference between market value and assessed value?

Market value is the price your property can sell for on the open market, while assessed value is set by the local government to calculate property tax.

2: Why is the assessed value usually lower than the market value?

Governments intentionally keep assessed value lower to make property taxes more reasonable. Market value reflects the full current worth.

3: How can I find my property’s market value?

You can check recent sale prices of similar properties, look at listings on property portals like MaadiVeedu.com, or hire a professional valuer.

4: How is assessed value determined?

Local authorities use government benchmarks (Guideline Value, Circle Rate, or Ready Reckoner Rate) and factors like property size, age, and type of construction.

5: Can I challenge my property’s assessed value?

Yes. If you believe it’s unfairly high, you can appeal to your municipal office with evidence from similar properties.

6: Why is it important to know both values?

Understanding both helps you make smart buying or selling decisions and ensures you aren’t overpaying property taxes.

7: Does market value affect my property tax?

No. Property tax is calculated based on assessed value, not market value.