What does the appraised value in the mill rate formula refer to?

The appraised value in the mill rate formula refers to the value set by the real estate appraisal. This value is typically established through a formal appraisal process, which involves a thorough assessment of the property's characteristics, its condition, and comparable properties in the market. This appraised value provides an official metric that local governments use to calculate property taxes based on the mill rate, which is a standard measure for taxation.

Understanding this concept is crucial for property owners and investors because the appraised value directly affects property taxes. While market comparison approaches, future projections, and original purchase prices may influence perceptions of value, they do not establish the official appraised value required for property taxation under the mill rate formula. The mill rate itself is applied to this definitive appraised value to determine the amount of tax owed.