It is that time of year when you have likely received your property assessment in the mail. I am often asked how the property assessment is calculated as people wonder why the value is less than what they think they could sell their home for.
The BC Assessors view properties each year in July. They consider the characteristics of the property, the location, amenities in the area and other factors to determine the value of the property and the home. The BC Assessment notice is issued at the end of the year based on the value estimated earlier in July. Any changes to the value from year to year is based on sales in the neighborhood, upgrades to the property and improvements to the area. Growing communities may see an increase in taxes due to property value increases or based on the need for more revenue in their municipality.
Homeowners may consider the property assessment as one resource to value their home. However, the market value of any property is subject to change based on ongoing sales in the neighborhood and other factors. The property assessment can’t be considered as the most effective valuation of the property for refinancing purposes or to set a price for sale of the property. Those evaluations must be conducted by an appraiser or a real estate professional.
Some other important things to consider once you receive your property assessment.
1. If you disagree with the property assessment you can appeal to the BC Assessment Authority. Visit www.bcassessment.ca for details.
2. Remember, the home owners grant applies on your tax bill each year. Once the value of your property exceeds $1.1M the grant is reduced incrementally and eliminated. Visit www2.gov.bc.ca/gov/topic.page?id=511EBE43329A48D0A6B78857C075A2FC for details.
3. In order to access the home owners grant you must meet the criteria. For more details visit your local city website.
Before buying a home you should consider the value of the property to establish the property tax costs, if water and utilities are included and when the taxes are payable. In most municipalities property taxes are due around July 1st each year while others are payable in two installments. Some municipalities separate out the water and utility cost which are due in February of each year while others include them in the property tax bill. By researching the property assessment and the property taxation in the neighbourhood you wish to live in you can be better educated and make a more informed decision on the property you wish to purchase.