We are purchasing a building for $1.2 M and the tax value is assessed at $1.7M. Will we still need 20%

Yes... For lending purposes, everything is based off the purchase price, not the assessed value. Furthermore, assessed value have absolutely NOTHING to do with fair market value. Many people look at assessed value, and assume that is what a property is worth "retail". All the assessed value means is what the county is taxing the property at - NOT what fair market value is. After you buy it for $1.2M, go argue with the county to lower the over priced taxes.

Yes.. Lenders always go by the LOWER of the sale price or appraised value.. As far as needing 20% down.. there are different loan programs which can allow you to purchase with less than 20% down.. If this is a residence, then there are options.. if it's commercial or a rental, then you will need at least 20% down.. I'd be happy to look at your complete loan scenario and advise you.. let me know.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893