process of setting a value on real or personal property (property tax), usually for the purpose of taxation. In most countries central government agencies do the assessing, but in some it is done by local officials.

Property is perhaps most commonly assessed on the basis of its annual rental value, as in Great Britain. In some countries, though, including the United States, Austria, and Denmark, the tax base is the property's capital value. Among the methods used to determine value are the analysis of market data to estimate the property's current market price, the estimation of the costs of reproducing the property minus the accrued depreciation, and the capitalization of the earnings of the property.

The last method seems most appropriate for the appraisal of commercial property and apartment buildings, whereas the second is well suited for appraising factories and other specialized properties. In practice, many assessing officers utilize an approach derived from all three methods, and the assessed valuation often is actually less than the property's current market value. Governments sometimes attempt to equalize effective assessed valuations by supplying a multiplying factor for various taxing districts based upon the degree to which their assessors undervalue.