Property Assessment and Property Taxes
It’s a new year, new beginnings, and also that time of year when you have likely received your Property Assessment in the mail.
Your property assessment has a big impact on the amount of property tax you pay on your home or investment property, and I get frequently asked how the property assessment is calculated. Most of the time, homeowners feel that the values are way off in comparison to where the market is currently. The most common statement I hear is “I could sell my house for way more than this value, so what are they thinking?”
The Assessments are carried out by city officials, who review properties every year at a certain point in the year. In British Columbia they conduct their reviews in July. The Property Assessment takes into account the attributes of the property, the area, enhancements in the region as well as various other components and factors in determining the value of the property.
Although it is based on the value determined back in July, the BC Assessment notice is issued toward the end of the year (we receive it in the first couple of weeks of the start of the following year). Any variance of dollar value from year to year is based on sales of similar properties in the area. Year over year, in what are determined to be up-and coming and growing areas, you are very likely to see an increase values comparatively speaking, which leads to increases in property taxes (the higher the value of your home, according to the assessment, the higher the property taxes you will have to pay).
You may also see a rise in taxes as well because of not only increases in property value but increase in the need for revenue in their respective district.
As a homeowner you may consider the property assessment as one resource used to value your home. But the market value of any property is subject to change based on ongoing sales in the area among various other factors. The property assessment cannot be automatically deemed the most effective method in valuing the property for refinancing purposes for example or to set a price for sale of the property in another instance. A professional appraiser or a real estate professional must be hired to conduct these types of evaluations.
Some other key points to consider once you have received your property assessment
1. There could be an occurrence in which you disagree with your property assessment. In such a case you can speak to the BC Assessment Authority. Visit their website www.bcassessment.ca for more details about the process.
2. Don’t forget that the homeowners grant, should you qualify, applies to your tax bill every single year. Of course, once your property value exceeds a certain threshold, the grant is reduced incrementally and eventually reduced to no grant after a certain amount. This year’s threshold is set at $1.525 million for 2021. Properties assessed over that amount may receive a partial grant. Go to www2.gov.bc.ca/gov/topic.page?id=511EBE43329A48D0A6B78857C075A2FC for more information.
3. You must meet the required criteria in order to qualify for the home owner grant. Each municipality is different and may have a different set of requirements. Your best bet is to go to your local city website for specific details.
Before purchasing a home you ought to consider the property value to determine the property taxes you will have to pay. You should also consider many of the subtleties such as whether water and utilities are included as well as consider when the taxes are payable.
In most municipalities property taxes are due on the first of July every year while, in other municipalities, the taxes are payable in two installments. Also, certain municipalities separate out the water and utility costs. For example, these costs are due in February while others include them in the property tax bill and thus a heftier lump sum payment is due all at once.
As always, a little research goes a long way. By taking a look ahead of time at the property assessment and the taxation in a neighborhood you are interested in making your home you stand to make a more informed decision on the property you are investing your hard-earned money into.
If you have any more questions, be it related to property taxes, your property assessment, or anything else related to mortgages or real estate, please feel to reach out – you can call 778 233 2377 or you can book a complimentary 15-minute consultation
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