Why Did My Market Value Go Down, But My Assessed Value Went Up?

It can be confusing to see your market value decrease while your assessed (taxable) value increases. Here’s a simple explanation of why that happens:

What’s the Difference?

• Market Value - This is what your property could sell for on the open market.
• Assessed Value - This is the value used to calculate your property taxes after applying any caps and exemptions.

Why Does This Happen?

1. Homestead Cap (10% Limit)

If your property has a homestead exemption, your assessed value is limited:

• It can only increase by up to 10% per year, even if your market value increases more than that.

2. Your Assessed Value May Be “Catching Up”

In previous years, your market value may have increased significantly, but your assessed value was held lower due to the cap. 

Now, even if your market value decreases, your assessed value may still increase because it is gradually catching up to the market value.

1. The Cap Does Not Go Backwards

The 10% cap limits increase, but does not automatically reduce your assessed value when market value drops.

Example

• Last year
  • Market value: $320,000
  • Assessed value: $275,000
• This year
  • Market value: $310,000 (decreased)
  • Assessed Value: $302,500 (10% increase from the prior year's assessed value cap)

Even though the market value went down, the assessed value increased because it was still below market value.

Other Factors That May Affect Your Assessed Value

• Changes to exemptions (added or removed)
• Ownership changes (can reset the cap)
• New improvements to the property

Key Takeaway

Your property taxes are based on the assessed value, not the market value.
Because of state laws like the homestead cap, the assessed value does not always move in the same direction as the market value.

Still have questions? We’re here to help, so don’t hesitate to reach out if you have any questions!

Contact Information:
Bexar Central Appraisal District
411 N Frio St
PO Box 830248
San Antonio, TX 78283-0248
Phone: 210-242-2432
Fax: 210-242-2454 or 210-242-2453