What is the definition of "true value" in property assessment?

The definition of "true value" in property assessment refers to the price a willing buyer would pay a willing seller. This concept embodies the principle of fair market value, which serves as a foundational guideline in property assessment practices. It reflects the real-world economic conditions that would govern a transaction between knowledgeable parties, both acting in their own self-interest.

True value encompasses all relevant factors, such as the location, condition, and unique attributes of the property, rather than relying solely on governmental appraisals or predetermined figures. This market-based approach ensures that assessments are grounded in current economic realities, providing a fair and reasonable estimate of what the property is worth in the marketplace.

Other options represent different aspects of property valuation but do not capture the essence of 'true value.' For example, the assessed value determined by the municipality is a figure that may or may not reflect the true market conditions at the time of the assessment. Similarly, the average market value of similar properties and appraised value set by a state panel can provide insights but may lack the specific buyer-seller context that true value encompasses. Ultimately, true value is fundamentally tied to the willingness of buyers and sellers to engage in a transaction at a specific price point.