Latin for "according to value," the term "ad valorem" is common in tax conversations. An ad valorem tax is flexible and dependent on the value of the specific asset, product or service. If you're a property owner, you're paying an ad valorem tax on your property taxes. To better understand how this term is used, here is a short guide to how ad valorem tax is calculated:
Fair market value - Fair market value is usually determined by a real estate agent after a careful examination of the property and local market. Fair market value is based on factors like size, location, features and condition of the home. It can also be affected by the values of similar properties in your neighborhood.
Appraisal value - Appraisal value is found through a professional home appraisal. Appraisers conduct a thorough inspection of your home to make sure it meets specific standards. Things like condition, age and visual appearance all factor into an appraisal value.
Assessed value - Assessed value is calculated by taking the fair market and appraisal values and applying the local tax assessment rate. Assessment rates are different depending on the municipality and can also change.
These different values combine to help you find the ad valorem tax value of a property. In turn, this value affects how much you owe in annual property taxes. Regardless of whether you want to buy, sell or refinance a home, knowing this term can help you better navigate the world of home finances.
Familiarize yourself with the differences between fair market value, appraisal value and assessed value to gain a better understanding of how your property taxes are calculated.
Shana Lundell has been a real estate professional since 2003 in Bourne, Cape Cod, Plymouth and the surrounding areas, where she’s lived since 2000. Shana is a luxury and waterfront specialist who has represented hundreds of buyers and sellers, including representing builders in over 100 new construction transactions in her career. She consistently achieves recognition awards for top production, including membership in the Coldwell Banker® International President’s Elite, an honor reserved for the Top 3% of agents globally. Shana ranks in the Top 100 of 4,000 Coldwell Banker agents in New England.
Shana works with a range of clients, including lifestyle properties, vacation residences, down-sizers, trade-up buyers, land, first-time home buyers, and new construction sales. She understands that moving happens for a myriad of reasons and has had the honor of helping all types of transactions. Many emotions can come into play during this time, but Shana is skilled at keeping calm and carrying on with care, professionalism, open communication, and the ability to keep things on target to achieve results. She guides her clients smoothly through the process, from dynamic marketing measures, negotiation and solution strategies, connecting pivotal professional resources, to coordinating the essential closing details.
Shana is proud to have over 100 five-star client testimonials that rave about her positive, professional, responsive, and authentic approach to real estate service. Love where you live. Live where you love. Looking to buy or sell? Call Shana Lundell!
