Texas Property Tax Consultant Practice Exam

How is market value categorized by the chief appraiser?

1. It is always equal to the most recent sales price

2. It is known as the appraised or assessed value

3. It is based only on the cost approach

4. It is half of the actual market value

The correct answer is: It is known as the appraised or assessed value

Market value is categorized by the chief appraiser as the appraised or assessed value because this assessment is a critical factor in determining property taxes. The appraised value represents the estimate of a property’s worth based on market conditions, property characteristics, and various valuation methods. While the appraised value can be influenced by recent sales data, it does not always equate to the most recent sales price, as other factors are considered, including property condition, improvements, and broader market trends. The appraiser utilizes multiple approaches—such as the sales comparison approach, cost approach, and income approach—rather than relying solely on one method like the cost approach. Additionally, market value is not defined as half of the actual market value, which would lead to confusion and inaccuracies in property assessments. By considering all these factors, the chief appraiser strives to determine a fair representation of a property's market value for taxation purposes.