Ignite FB Tracking Pixel Ad valorem tax, millage rates & more: Key terms to know - Brian Flanary
Caudill Properties, Inc.
Brian Flanary, Caudill Properties, Inc.Phone: (615) 806-4896
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Ad valorem tax, millage rates & more: Key terms to know

by Brian Flanary 03/05/2025

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
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Brian Flanary

 

Although I'd rather it be in person, I'm glad you found me online!  

I love real estate and helping others. Most of my friends would tell you I work too much and that I love a good laugh. I definitely believe in working hard and playing hard.
As a TN native, I take pride in using my local real estate knowledge to help you find the perfect location and home. If you're relocating to the area and don't know where to start, I'd love to show you around.
Most of my new clients find me by referral and I can't say "thank you" enough to those who have recommended me.  I'd love the opportunity to earn your future referral too.
I've closed millions in real estate, and work extremely hard to make sure my clients have the best experience possible buying, selling, relocating and investing.