A lot of conversation over the last few days has been about the BC Property Assessments that recently came out. People are asking questions…Did you get your BC Assessment? What was your assessment for this year? Is this is what my house is actually worth? It was even the topic at the table when our extended family got together for a night out.
What is the Difference between Assessed Value and Market Value?
First off, I will be completely honest with you, I don’t usually pay much attention to my tax assessment – you would think as a realtor it would be something I reviewed but the last couple of years have been CRAZY! This year, however, I decided I'd better take a closer look and make sure all the information was correct. I don't want to pay more property taxes than I actually have to.
What I found was that the square footage reported was not accurate, it was actually out 600 square feet and even the style of home was wrong! Could this change the assessed value? Maybe. I decided that I would report the discrepancies and ask for a review. Check-in if you’re interested in finding out the outcome.
In the meantime, I recommend that you take a few minutes to review the details of your own property assessments. You should have received your assessment in the mail early January. You can always check your assessment on the BC Assessment website. All you have to do is enter your civic address.
What is the Difference between Assessed Value and Market Value?
Assessed Value: is the value that local municipalities use to calculate your annual property tax bill and is based on what your property was worth in July of the previous year (2022).
Market Value: is the price at which a property would sell under normal market conditions. It is simply about supply and demand and how much buyers and sellers are willing to pay and sell a property for.
If you are figuring out whether your property taxes are being calculated correctly, refer to your home assessment. If you are buying or selling a home, market value is the metric that matters.
When you compare how assessed value and market value are calculated. It is easy to see why the two numbers are different. The real estate market is constantly changing and by the time you receive your BC assessment six months has gone by so it’s important not to use this when determining the price you should list your home.
Over the years I have seen a number of home sale negotiations fall through and interesting enough what these deals had in common was either a buyer or a seller was positive that the real value of the house was the assessed value and
unfortunately, that is often just not the case.
I have seen sellers miss out, on what was at the time and market, a great price for their property and I have seen buyers miss out on a great price for a home because the BC Assessment undervalued the house.
Why Your Home Assessment May NOT Reflect the Market Value for Your Home
The Assessed Value on which your property taxes are based has a very good chance of being either valued too high or too low.
Assessments are:
• Based almost solely on statistical data but with limited data points, for example, they will compare homes of the same type, square footage, lot size, etc, but there can be a lot more variables that aren't included.
• Site visits by assessors are rare
• Factors like view, landscaping, finishings etc. are not included in the calculations
• Assessments are done once a year in July - six months later the housing market may be drastically different.
• Assessments may include inaccurate information
Just yesterday I got a call from someone who is going to be selling their property and wanted to use the assessed value as their list price. I had to explain to them that with increased interest rates last year – prices have dropped and that their assessment did not reflect true market value. As you can imagine they were disappointed, but will still be selling their home at an adjusted price.
Determining the Market Value of your Home
To get an accurate idea of what your home is worth get a Comparative Market Analysis (CMA), which is done by a qualified realtor and it’s FREE!
• It compares your home to other homes in your specific neighbourhood
• It factors in the current market
• It understands that things like finishings, view, and special features like hot tubs and heat pumps, or fancy landscaping can add to the value of the home.
Wondering what the true Market Value of your home is? I would be happy to do a CMA for you! Call or Text me at : 778.878.4687