This week's blog post courtesy of Paul Macara, licensed broker with The Mortgage Group in Victoria - macaramortgages.com
By now, you’ve probably received your 2018 property assessment in the mail. And, like most of your neighbours, you’ve likely seen an increase in your assessed value when compared to last year.
Property assessments are double-edged. On one hand, an increase in value is thought to speak to the actual value of your property, while on the other hand, an increased assessment might mean higher taxation.
But is this true?
Does a property assessment reflect your property’s true value AND will an increase in assessed value increase your property taxes?
Below are common answers to frequent questions about property assessments.
How are Property Assessments Conducted?
When conducting an assessment, BC Assessment considers properties in similar areas comparing recent sales prices between properties sharing similar characteristics. For example, an article in the Globe and Mail outlines determining the value of a 5,000 square foot home in Surrey, situated on a 10,000 square foot lot. To make a determination of value, BC Assessment would review sales prices for homes of a similar size and on similar sized lots. In addition, they would consider properties of a similar age, style, and location.
To help make determinations of value, BC Assessment takes advantage of additional tools, including:
- The review of building plans and permits
- Street front photography
- 3-D modeling of condominiums
- Satellite imagery
While reviewing properties from their exteriors is simple enough, more challenging is assessing the state of a property’s interior. To help gauge certain property interiors, BC Assessment may send a letter to the homeowner(s) of properties with significant exterior renovations, as these often signal interior renovations too. The letter acts as a formal inquiry into the state of interior renovations.
Are Property Assessments a Reflection of Real Value?
Not necessarily, no. Many buyers and sellers like to defer to the assessed value of properties when it comes to negotiating a better price (as a buyer) or defending a higher value (as a seller), but truthfully, the assessed value shouldn’t be mistaken for the current real estate value.
A comparative market analysis conducted by a Realtor will use very recent data, while property assessment data is often stale (a few months old) by the time assessment notices are received. The best determination of value is by reviewing recent sales of similar properties at the time you want to evaluate data. As you can imagine, in fast-paced markets, the value of homes can shift (up or down) in only a matter of weeks.
If my Assessment Increased, Will This Signal an Increase in my Property Taxes?
Interestingly enough, no. Again, upon reading the Globe and Mail article, it turns out that an increase in one’s own property assessment won’t signal an increase in taxation only when that assessment has increased higher than the average change for that property class in a given municipality.
Curious about your Neighbors?
If you’re curious to see how your property value stacks up to that of your neighbours, it’s beneficial to make use of a tool through BC Assessment, called e-Value.
In Compete Disagreement with your Property Assessment??
Those who feel their property assessment is inaccurate can appeal the assessment. Find additional details here.
Of course, appealing the assessment will require reliable statistics. In other words, you wouldn’t be able to verbalize why you think your home should be assessed higher or lower, you’d need to provide evidence (like recent sale data) in order to succeed with an appeal.
To make an appeal, a review must be requested through BC Assessment. Once the review has been reviewed a hearing date will be set. You will receive a 30-minute window to share your evidence-based information.
Looking for your Property’s Current Market Value?
If you’re interested in having a current market analysis of your home, please contact me and I’ll gladly provide you with the referral of a professional who can help.