Is My Property Tax Assessment Too High? Check It Against the Index

The short answer

An assessment is high for your area if it is a bigger share of what your home was worth on the valuation date than the share your assessor says they use. Work out that worth from what you paid and how your area’s index moved to the valuation date, divide the assessed value by it, and set the share beside the ratio on your notice. For a $310,000 purchase in March 2014 in ZIP 78704 with a made-up $520,000 assessment as of January 2025, the ZIP index implies $604,811 on that date, so the assessment is 86% of it. The assessment check does this arithmetic for any purchase and notice.

Assessed value is not market value

Market value is what the home would sell for. Assessed value is the figure the local assessor puts on it to compute the property tax bill. The two differ for three ordinary reasons. Many states and counties assess at a fixed fraction of market value, set by law, so a 80% assessment ratio is a rule, not an error. The valuation date is usually a fixed day, often January 1, months before the notice arrives. And assessments are updated on a schedule, yearly in some places and much less often in others, so they lag the market in both directions. None of that means an assessment is wrong; it means the comparison has to be made on the valuation date and against the stated ratio.

A benchmark for the valuation date

Implied value on the valuation date = what you paid × (index at valuation date ÷ index at purchase)

Share = assessed value ÷ implied value

The index is the FHFA House Price Index for the smallest area with data for both dates: ZIP, then county, then metro, then state, the same order the index method uses. State and metro series are quarterly, so a January date is read against the first quarter; county and ZIP series are annual and FHFA calls them developmental, so it is read against the year. What comes out is the area’s average path applied to your purchase, a benchmark that knows nothing about the house, which is exactly what makes it a fair check on a mass appraisal that also mostly does not.

A worked example

You bought in March 2014 for $310,000 in ZIP 78704, Austin, Texas. Your notice, in this made-up case, assesses the home at $520,000 as of January 2025.

1. Index for ZIP 78704 (annual, developmental): 1529.73 in 2014, 2984.51 in 2025. Ratio 2984.51 ÷ 1529.73 = 1.95.
2. Implied value on the valuation date: $310,000 × 1.95 = $604,811.
3. Share: $520,000 ÷ $604,811 = 86%. Gap: $520,000 − $604,811 = −$84,811.

If the notice says the county assesses at 100% of market value, 86% says the assessment is below the area benchmark, which is common where assessments lag a market that rose. If it says 80%, the assessment is a little above its own ratio. The number is the same; what it means depends on the ratio beside it.

The same purchase on the Texas index

The state series implies $669,029 for the same date and the share falls to 78%: a gap of $64,217 between two honest benchmarks for one house. The ZIP is the smaller area and the better one, but the spread is a reminder that this is a benchmark, not a valuation of your house.

Reading the share

• Near the stated ratio. A normal assessment. The market moved, the assessor followed at their own pace.
• Well above it. A reason to read the property record on the notice: square footage, lot, bedrooms, condition class. Errors there are the usual ground for a successful appeal, and comparable sales near the valuation date are the usual evidence. An index figure is neither.
• Well below it. Common after a run of price rises in a place that reassesses slowly. It is not a windfall to report; it is the schedule.

The same assessment against today’s estimate ($604,811 on the ZIP index, 2025) is 86%; against the Texas estimate of $682,635 (2026 Q2) it is 76%. That is a different question, how far the market has moved since the valuation date, and the tool shows it as a second line rather than mixing the two.

What this comparison cannot know

• Your house. The benchmark tracks the area’s average. Renovations, condition and lot are invisible to it, and the assessor’s record may include them.
• Sales the index never sees. The FHFA index is built from mortgages bought or guaranteed by Fannie Mae and Freddie Mac, so cash, jumbo, FHA and VA purchases are not in it (FHFA HPI FAQ).
• Local rules. Assessment ratios, caps on yearly increases, exemptions and appeal deadlines differ by state and county. Read them off the notice; this guide models none of them.
• An appraisal. It is not one, and not legal or tax advice. An appeal is decided on local evidence rules.

Sources

• FHFA House Price Index datasets, the annual ZIP file and the quarterly master file.
• FHFA HPI frequently asked questions, on what the index includes and the developmental indexes.
• FHFA HPI technical description, the repeat-sales method.

This guide is for informational purposes only. It is not an appraisal, and not financial, tax, lending or real-estate advice. Every estimate on this site tracks an area’s average, never a particular house. Confirm anything that matters with a licensed appraiser or your lender.

Last reviewed: September 2026 · Against the FHFA House Price Index (annual ZIP file dated March 31, 2026; master file through 2026 Q2).