Friday, February 16, 2007
What is it Worth?
Property Assessment Notices
Property owners throughout BC are receiving their 2007 assessment notices this month from BC Assessment (BCA).
Often there is a difference between the property value on the assessment notice and the market value determined by a REALTOR and often homeowners will ask why. What accounts for the difference? There are two reasons. The first has to do with when. The second has to do with how.
When:The assessment notice is BCA's estimate of a property's market value as of July 1, 2006. In comparison, a REALTOR'S market value assessment is typically current. In our active local market, six months can mean many thousands and even tens of thousands of dollars.
How:BCA has a database of 1.781 million properties. When a new property is created through zoning or construction, or when an existing property changes, a BCA appraiser visits the site and looks at the lot size, structure and other factors such as whether the property is on a quiet street with lanes or a busy boulevard. BCA appraisers do not visit each property annually to update the database. Instead, they use what is known as a mass appraisal system, calculating the values by evaluating prices for homes sold in each neighbourhood, or of similar units in a strata complex as of July 1st, and then applying the information to arrive at an assessed value. BCA analyzes a broad range of variables for each property including house type, square footage, age, heating, pools, spas and outbuildings such as garages, sheds and gazebos.
REALTORS determine the value of a property by scrutinizing the most recent comparable data for homes sold in a neighbourhood on the MLS. REALTORS 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 also take into account view lines, architectural styles and landscaping.
Where every lot and every home on the street are generally the same, both BCA's value and the REALTOR'S value will be similar, assuming a stable market.
Differences will more likely occur in neighborhoods where every lot on every street is different, every home's architecture is unique and every view is distinct. Differences also occur when property owners make changes such as renovations, that the BCA does not know about.
BCA's assessment data are used to create the assessment roll, which is used by municipal governments to levy property taxes. Municipalities adjust their tax rates to reflect changes in assessments. Municipal budget requirements dictate the taxes raised by each class. Just because your assessment increased doesn't necessarily mean your property tax will increase by the same proportion.
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