What Your Property Assessment Really Means.
What Your Property Assessment Really Means.
try to borrow some.” – Benjamin Franklin
Well…it seems that we have barely survived the massive windstorm a few weeks ago that left many Nanaimo residents without power for days, and now we have just received the dreaded envelope from BC Assessment. To open or not to open – that is the question that even Prince Hamlet from Shakespeare would have spoken out loud. For some residents, they are hoping to see a higher figure, that provides comfort in knowing that their home has been a solid investment. For others, they are hoping for a lower number, as they feel that the lower assessed value will reduce their property taxes.
Do NOT rely on your BC assessment to advise you of the fair market value for your property – the market has changed dramatically since this number was determined. It is critical to understand that “assessed value” can differ greatly from actual “market value” and wanted to explain this a bit more.
Assessed value is calculated by a number of factors including age, size, types of construction materials and lot size and sale prices for properties up to July 1, 2018. Sales that take place after this day that same year are not calculated in the assessment. Once this has been determined, property taxes are charged to the owner based upon a set percentage rate. Simply put, the assessed value of your home determines tax value.
Market value is the price that your home will likely sell for within a specific time frame that is reasonable. It is calculated by the current average sale and list prices of similar homes in that neighborhood and are established with the methodology of what a typical buyer would pay for your home. The market value means what an average buyer will pay, not a specific buyer who is willing to pay more simply because they have fallen in love with it and want to ensure they are able to purchase it. We do see this occur with unique style homes, or sometimes homes that offer features such as an in-ground pool (which many buyers do not want), detached shop, and other amenities. Without the sage advice of a real estate professional, it can be difficult to determine the market value of a home as it can be challenging to determine a value of a similar home with a view compared to one that backs onto parkland on the same street.
Why have assessments dropped for some and increased dramatically for others? It can be very confusing when you hear of a co-worker whose home assessment declined in price, while your home may have increased 20 percent or more. This was the case with one of our past clients who contacted us this week asking us to explain the process of property assessments. Tax assessors are required to determine the value of properties based on the criteria mentioned earlier but are not mandated to ensure that the assessed value is adjusted to align with current market values. A leap in assessed value often means that BC Assessment is attempting to catch up to the market value, but this does not happen regularly.
Our MMS Homes Team understands that it can be frustrating to figure out what your assessed value should be. If you are considering disputing your assessment, or are interested in the current market value of your home, our team is here to help. We are happy to provide you an assessment review which will include homes that have sold with interior and exterior photos, room measurements, lot size and related sales data that you can use to review your assessment at NO cost or obligation. You don’t need to be thinking of selling – we truly want to share the information that we as professional realtors have access to in order to help guide you to make an informed decision about your assessment.
Did you know that only 2 percent of property owners appeal their assessment? “As many as 20 percent of all residential property owners in the province should be appealing their property assessments”, says Peter Morris, author of “How to Successfully Appeal Your B.C. Assessment”. Morris states that the high volume of properties that B.C. Assessment has to evaluate creates an opportunity for mistakes to be made made. Is your property one that should be appealed? Let our MMS Team help you with this process.
Let our MMS Team help you. Call Brian & Myles McCullough today for a FREE review of your assessment at 250-751-1223 and let’s get you moving in 2018 in the right direction!
Brian & Myles McCullough