The assessed value of a home or property in British Columbia is determined by the local government for the purpose of calculating property taxes. It is based on a variety of factors such as the size, location, and age of the property, as well as recent sales of similar properties in the area. The assessed value may not necessarily equal the market value, as it is only used as a starting point for determining property taxes, and the market value can change frequently due to a variety of factors such as supply and demand, market conditions, and the local economy. Additionally, the assessed value may not take into account certain factors such as the condition of the property or recent upgrades, which could affect its market value. Ultimately, the market value of a property is determined by what a buyer is willing to pay for it, whereas the assessed value is a government-determined estimate for tax purposes.
Below we dispel some of the most common myths about the assessed value and how they relate to market value and property taxes.
MYTH #1: Market value and assessed values are the same
FACT: the market value of a home is determined by supply and demand at the time the home is listed for sale.
This can greatly vary from the property’s assessed value. There are a few reasons for this:
- The assessed value is based on July of the previous year, however, the information is not released until the following January. The market can fluctuate frequently so the assessed value information is already dated by the time it reaches homeowners.
- BC Assessment does not have the capacity to walk through every home in BC to determine what changes have been made to the home and what condition the home is in. As an example, some homeowners have finished basements or put in suites without permits, and this information may not be accessible by BC Assessment. They also place a large value on the land and very minimal value on the home. The date the home was built greatly impacts the BC assessment value, which can vary significantly from the market value.
- If the assessment has always been low, it’s unlikely that a homeowner we appeal the value, as they may be worried their property taxes will go up
MYTH #2: If my assessment goes up, my property taxes go up
Fact: Your taxes are based on your municipality’s budget which usually comes out in March.
They look at the assessed value for every home in the municipality and determine a mill rate to charge in order to meet their budget for the year. If everyone in a neighbourhood has an increase in assessed values, then it will be relative to how much the taxes go up. If someone’s assessed value increased dramatically more than their neighbour’s, then they may see proportionately more taxes compared to the neighbours around them.
MYTH #3: I’m stuck with the assessed value I get.
FACT: BC Assessment has an appeal process that takes place in January once the new values come out.
If you need help appealing your assessment, we are happy to help you with this appeal by selecting comparable properties in your neighbourhood that have sold recently.
We hope you now have a better understanding of Assessed Values but if you have any questions, please contact our team as we are happy to help!
