Ad valorem tax & other terms property owners should know

by Roni Agress 12/10/2023

Ad valorem is a Latin term meaning "according to value." In tax language, ad valorem means a flexible value dependent on the specific asset. Ad valorem is just one of many important terms related to property taxes you should know. Here are a few more examples of important property tax terms:

Assessed value

Assessed value refers to the value of your property as determined by the tax assessment rate. The assessed value of your property is the final determination of how much you need to pay in property taxes. To find the assessed value, you multiply the local assessment rate by the fair market value.

Using the following formula, we can figure out the assessed value depending on market price and assessment rate:

Assessed Value = Market Value x (Assessment Rate / 100)

For example, if the market value is $150,000 and the assessment rate is 90%, the assessed value comes to $135,000.

Fair market value

Fair market value is determined by factors including the features and size of your home in addition to outside variables like the local market. The value of similar properties in your area can affect the fair market value, making it important in finding the best buying or selling price for a piece of property.

Millage rate

Millage rate is a specific kind of tax rate. It's based on the amount per $1,000 of property value. Multiple millage rates can go into determining property tax amounts, including different rates from different local agencies like school boards, counties and emergency service providers.

These are only a few of the most important property tax terms to know. With a better understanding of the terminology, you'll be better equipped to make the best real estate decisions.

About the Author

Roni Agress

Roni Agress brings to William Pitt Sotheby’s International Realty an accomplished and diverse history spanning three decades in entertainment management. Her experience, representing and assisting international performing artists and the administration of their production companies led to the establishment of her own firm in 1995. A passion for excellence, a strong work ethic and a commitment to getting the job done and an ability to anticipate, meet and manage is the foundation upon which Roni has built her career as a full-time realtor. As a resident of Redding, Connecticut since 1989, she possesses a detailed knowledge of the local markets, trends and values. Enthusiasm, vitality, resourcefulness and a can-do spirit accompany every transaction. Roni specializes in residential sales and relocation. She is an award-winning Realtor, an Accredited Buyer Representative and is Relocation Certified. • 2001 to Present – Sales Associate Ridgefield-Redding Brokerage • Gold Star, Silver Star, and Bronze Star Performance Awards – William Pitt Sotheby’s International Realty • #14 Company-wide in Units and #2 in Units in the Ridgefield Brokerage in 2013 • CT Magazine Five Star Performance Awards • 2011-2014 serving as a Director/Officer to the Ridgefield Board of Realtors