How important are BC’s property assessments? (Apart from the fact our property taxes are tied to them)
The 2012 property assessments for British Columbians being mailed this week confirm what we already knew: House prices in Vancouver, West Vancouver, North Vancouver, Burnaby and Richmond are high and still climbing. However, declines in assessed values in the Sea to Sky region, including Whistler, may have caught some by surprise.
Most single-family homes in Vancouver have increased in value by 10-to-25 per cent, according to area assessor Jason Grant, with a typical home on a 33-foot lot on the west side assessed at $1.6 million, up from $1.2 million last year.
On the east side, the example provided by BC Assessment shows an increase to just over $1 million from $816,000 a year ago.
Apartment values are up more modestly, but a two-bedroom apartment on the west side is quoted at $666,000, up 3.7 per cent from last year’s $642,000.
Assessments are established by analyzing recent sales as well as age, size, condition, location and other characteristics of a property. But the assessed value may – in fact, often does – vary from the market value when it’s time to buy or sell.
The main function of the assessment is not to set a benchmark for a market price but rather to calculate property taxes. The assessed value is multiplied by the mill rate set by city council, which in Vancouver in 2010 was $2.14 per $1,000 of assessed value. The property tax on a $1-million home then would have been $2,140 although the total on the tax invoice would be much higher because the city also collects funds for other agencies, including the regional district, school taxes for the B.C. government, TransLink, the Municipal Finance Authority and BC Assessment itself. There is also a shift in the tax burden from business to residents that adds another two per cent or so.
For the city, the important number is the total assessment roll, which increased to $254 billion in the 2012 assessment from $222 billion a year earlier. From this base, the city finance department determines what rate would be required to generate the same level of revenue as the year before and then calculates the rate needed to produce enough additional revenue to finance its operations for the coming year.
The vast majority of taxpayers, close to 99 per cent, do not dispute the assessment on their property. Some may even take delight in the rising value of their homes.
But for all their care, provincial assessors can easily miss improvements that would command a higher listing price, so would-be sellers should get an independent appraisal.
While it is entertaining to cruise the BC Assessment website and compare the value of your home to others, every property is unique and every buyer has his or her own criteria for investing in real estate.
Both buyers and sellers should use caution in their use of the information provided by BC Assessment.
Homeowners planning to neither buy nor sell and who have no objection to the values ascribed to their proper-ties need not concern themselves with BC Assessment’s latest revelations. An assessment notice is not a report card. It’s simply an estimate of what real estate may be worth.
If you have a roof over your head, heat, hot water and enough room to raise your brood, it doesn’t much matter if the provincial assessor says its value is up or down five, 10 or 20 per cent.
It’s your home. Enjoy it.
Source: Vancouver Sun
