Why is the tax value sometimes lower than the market value?
This occurs during the lapse of time between revaluations. In the year of a revaluation, we are required to value property at 100% of its market value. If no changes are made this value is maintained every year until the next revaluation. If the owner adds a house or other improvement between revaluations, that improvement is added based on costs developed for the year of the last revaluation, not current costs. Even if no improvements are made, real estate usually increases in value each year. For most property this means that in the later years of a revaluation cycle, the assessed value is less than the actual market value.
