diff --git a/changelog.d/added/8351.md b/changelog.d/added/8351.md
new file mode 100644
index 00000000000..a033ffcd941
--- /dev/null
+++ b/changelog.d/added/8351.md
@@ -0,0 +1 @@
+Add primary residence value and derive assessed property value from state assessment rates.
diff --git a/policyengine_us/parameters/gov/local/tax/assessment_rate.yaml b/policyengine_us/parameters/gov/local/tax/assessment_rate.yaml
new file mode 100644
index 00000000000..7181e39929e
--- /dev/null
+++ b/policyengine_us/parameters/gov/local/tax/assessment_rate.yaml
@@ -0,0 +1,131 @@
+description: Assessed property value equals primary residence market value multiplied by this state-level ratio.
+metadata:
+  unit: /1
+  period: year
+  label: Assessed-to-market property value ratio
+  breakdown:
+    - state_code
+  reference:
+    - title: Michigan Compiled Laws Section 211.27a(1)
+      href: https://legislature.mi.gov/Laws/MCL?objectName=mcl-211-27a
+    - title: West Virginia State Tax Department, Ad Valorem Property Tax
+      href: https://tax.wv.gov/Business/PropertyTax/Pages/AdValoremPropertyTax.aspx
+# Default to 1 until state-specific assessed-to-market value ratios are modeled.
+AL:
+  0000-01-01: 1
+AK:
+  0000-01-01: 1
+AZ:
+  0000-01-01: 1
+AR:
+  0000-01-01: 1
+CA:
+  0000-01-01: 1
+CO:
+  0000-01-01: 1
+CT:
+  0000-01-01: 1
+DE:
+  0000-01-01: 1
+FL:
+  0000-01-01: 1
+GA:
+  0000-01-01: 1
+HI:
+  0000-01-01: 1
+ID:
+  0000-01-01: 1
+IL:
+  0000-01-01: 1
+IN:
+  0000-01-01: 1
+IA:
+  0000-01-01: 1
+KS:
+  0000-01-01: 1
+KY:
+  0000-01-01: 1
+LA:
+  0000-01-01: 1
+ME:
+  0000-01-01: 1
+MD:
+  0000-01-01: 1
+MA:
+  0000-01-01: 1
+MI:
+  0000-01-01: 0.5
+MN:
+  0000-01-01: 1
+MS:
+  0000-01-01: 1
+MO:
+  0000-01-01: 1
+MT:
+  0000-01-01: 1
+NE:
+  0000-01-01: 1
+NV:
+  0000-01-01: 1
+NH:
+  0000-01-01: 1
+NJ:
+  0000-01-01: 1
+NM:
+  0000-01-01: 1
+NY:
+  0000-01-01: 1
+NC:
+  0000-01-01: 1
+ND:
+  0000-01-01: 1
+OH:
+  0000-01-01: 1
+OK:
+  0000-01-01: 1
+OR:
+  0000-01-01: 1
+PA:
+  0000-01-01: 1
+RI:
+  0000-01-01: 1
+SC:
+  0000-01-01: 1
+SD:
+  0000-01-01: 1
+TN:
+  0000-01-01: 1
+TX:
+  0000-01-01: 1
+UT:
+  0000-01-01: 1
+VT:
+  0000-01-01: 1
+VA:
+  0000-01-01: 1
+WA:
+  0000-01-01: 1
+WV:
+  0000-01-01: 0.6
+WI:
+  0000-01-01: 1
+WY:
+  0000-01-01: 1
+DC:
+  0000-01-01: 1
+GU:
+  0000-01-01: 1
+MP:
+  0000-01-01: 1
+PW:
+  0000-01-01: 1
+PR:
+  0000-01-01: 1
+VI:
+  0000-01-01: 1
+AA:
+  0000-01-01: 1
+AE:
+  0000-01-01: 1
+AP:
+  0000-01-01: 1
diff --git a/policyengine_us/tests/policy/baseline/gov/local/tax/assessed_property_value.yaml b/policyengine_us/tests/policy/baseline/gov/local/tax/assessed_property_value.yaml
new file mode 100644
index 00000000000..6cc4dc39a75
--- /dev/null
+++ b/policyengine_us/tests/policy/baseline/gov/local/tax/assessed_property_value.yaml
@@ -0,0 +1,24 @@
+- name: Case 1, assessed property value defaults to primary residence value.
+  period: 2025
+  input:
+    primary_residence_value: 400_000
+    state_code: WA
+  output:
+    assessed_property_value: 400_000
+
+- name: Case 2, assessed property value applies the state assessment rate.
+  period: 2025
+  input:
+    primary_residence_value: 400_000
+    state_code: MI
+  output:
+    assessed_property_value: 200_000
+
+- name: Case 3, existing direct assessed property value input is still accepted.
+  period: 2025
+  input:
+    assessed_property_value: 300_000
+    primary_residence_value: 400_000
+    state_code: MI
+  output:
+    assessed_property_value: 300_000
diff --git a/policyengine_us/variables/gov/local/tax/assessed_property_value.py b/policyengine_us/variables/gov/local/tax/assessed_property_value.py
index 46842490ae3..a26666782da 100644
--- a/policyengine_us/variables/gov/local/tax/assessed_property_value.py
+++ b/policyengine_us/variables/gov/local/tax/assessed_property_value.py
@@ -7,5 +7,9 @@ class assessed_property_value(Variable):
     label = "Assessed property value"
     unit = USD
     quantity_type = STOCK
-    documentation = "Total assessed value of property owned by this person."
     definition_period = YEAR
+
+    def formula(person, period, parameters):
+        state_code = person.household("state_code_str", period)
+        assessment_rate = parameters(period).gov.local.tax.assessment_rate[state_code]
+        return person("primary_residence_value", period) * assessment_rate
diff --git a/policyengine_us/variables/household/assets/primary_residence_value.py b/policyengine_us/variables/household/assets/primary_residence_value.py
new file mode 100644
index 00000000000..ee73fb8d65e
--- /dev/null
+++ b/policyengine_us/variables/household/assets/primary_residence_value.py
@@ -0,0 +1,17 @@
+from policyengine_us.model_api import *
+
+
+class primary_residence_value(Variable):
+    value_type = float
+    entity = Person
+    label = "Primary residence value"
+    documentation = (
+        "Market value of the person's primary residence, not assessed value."
+    )
+    unit = USD
+    quantity_type = STOCK
+    definition_period = YEAR
+    uprating = "gov.bls.cpi.cpi_u"
+    reference = (
+        "https://www.census.gov/programs-surveys/acs/microdata/documentation.html"
+    )