What is the key difference between market value and assessed value?

The key difference between market value and assessed value lies in their definitions and purposes. Market value refers to the price that a property would likely sell for in the current market, influenced by the willingness of buyers to pay and the current demand for a property. It reflects what a buyer is prepared to offer for a property, taking into account variables like location, condition, and similar sales in the area.

On the other hand, assessed value is primarily used for taxation purposes. It is determined by local government authorities and represents the value assigned to a property for tax assessment purposes. This value may not align with the current market conditions, as it is often based on set criteria established by the local appraisal office.

The other options do not accurately capture the fundamental distinction. While it's possible for the assessed value to be higher than market value in some cases, that's not a rule that applies universally, as stated in one of the choices. The assertion that market value is determined by local governments is incorrect since it hinges on the actions of buyers in the open market. Lastly, suggesting that there is no significant difference between the two disregards the specific applications and implications of each value, which are essential in real estate transactions and taxation.