What is the difference between assessed value and market value?

Assessed value is the dollar value assigned to a property by a government tax assessor for the purpose of calculating property taxes. Market value is the estimated price the property would bring in an open and competitive sale. Many jurisdictions assess property at a fraction of market value, called the assessment ratio. For example, if a property has a market value of 300,000 dollars and the assessment ratio is 80 percent, the assessed value is 240,000 dollars. The tax is then calculated on the assessed value.