Nothing happens. The tax-assessed value exists to calculate your property taxes, and that is the end of its job. A buyer does not care what the county assessed the home at, and neither does the IRS. Selling below assessed value creates no problem on its own. The number that matters when you sell is your mortgage payoff. If the sale price will not cover what you owe plus your selling costs, the deal becomes a short sale, which requires your lender's approval before it can close. Short of that line, you are free to sell for whatever the market will bear. Assessed value and market value drift apart all the time, especially on a home you have owned for years, so do not treat the county's figure as a floor or as a signal of what the house is really worth. If your likely price sits close to your payoff, loop in your agent early so you know whether you are in normal-sale or short-sale territory before you list.