What’s it worth? Assessing a home
On January 5, BC Assessment sent property owners their 2005 assessment notice.
The assessed value on these notices isfrequently different from the property value determined by a realtor.
What accounts for this difference?
1. BC Assessment (BCA), a government Crown corporation, is responsible for sending every property owner a property assessment notice each January. The notice contains BCA’s estimate of the market value of the property as of the previous July 1. The purpose of the information is to create the assessment roll, which is used by local governments to levy property taxes.
2. BCA has a database of 1.75 million properties. When a new property is created through zoning or construction, or an existing property changes, a BCA appraiser visits the site and looks at the lot size, the structure and other factors. To update values, BCA appraisers don’t visit each property annually. Instead they use a mass appraisal system. Values are calculated by evaluating prices for homes sold in each neighbourhood around July 1 and then applying the information to get an average price. BCA also uses a broad range of variables for each property. These include lot size, house type, square footage, age, type of heating and type of garage.
When a realtor determines a property value, they scrutinize the most recent comparable data for homes sold in a neighbourhood using the MLS. They also examine the exterior and interior of a property in detail, noting alterations and major renovations, such as new kitchens or bathrooms that affect the value of a home. They take into account view lines, architectural styles and landscaping.
When a new property is created through zoning, construction or changes to an existing property, a BCA appraiser visits the site and looks at the lot size, the structure and other factors, such as whether the property is on a quiet street with lanes or on a busy boulevard.
Where every lot and every home on the street is generally the same, both BCA’s value and a realtor’s value will be similar. Differences will more likely occur in neighbourhoods where every lot on every street is different, every home’s architecture is unique and every view is distinct.
It’s worth more, a lot more
Homeowners throughout the Lower Mainland saw their properties increase in value between 9 and 30 per cent, according to David Highfield, corporate advisor for BC Assessment.
“We recorded the largest annual increases in more than a decade,” says Highfield, who estimates that BC Assessment assessed more than one million properties throughout the Lower Mainland.
Assessments and property taxes
Local governments determine property taxes by examining assessed values and then establishing their mill rates to generate needed revenue. Rising property values will mean that local governments can reduce tax rates to bring revenues back into balance with assessments. Although tax rates may be revenue neutral in all or some property classes, individual property owners may still experience increases in their property taxes.