Assessment

An assessment is an appraisal of your property that is conducted by assessors for tax purposes (similar to the nitpicky appraisal you and your friends did on your former S.O.’s new love). How this is done varies by state.

For example, in Illinois, an assessment is done on one third of the fair-market value of both your property and your property improvements combined. So, if you own a piece of land with a value of $15,000, the assessed value of that land is $5,000. If the house on that land is worth $150,000, one third of that is $50,000. So, the total assessed value is $55,000.

You then subtract your exemptions and that will be your net assessment. Then, you multiply this by your tax rate and that is your property tax amount. Complicated? Yes, but don’t worry about it if you’re not planning on going into the assessment field. Just enjoy your latte and hope that your property taxes don’t go up.