A few days ago homeowners all over Lower Mainland have received their 2017 Property Assessments. Single-family homeowners have seen an increase of 30 to 50 per cent in one year. Most condo owners in Metro Vancouver have also seen major increases of 15 to 30 per cent.
Every year B.C. Property Assessment come out I get a ton of questions from my clients. I thought I’d be easier to write a blog post about it.
Here are things you need to know about your 2017 property assessments.
- Even though Property Tax Assessment are sent out in January of the new year the assessed value is as of July 1 of the previous year. Your 2017 tax assessment roughly estimates how much you could have sold your property for on July 1, 2016. Whatever market changes happen after July 1, 2016 will be factored into your 2018 tax assessment. Unfortunately, most of the Metro Vancouver home prices have decreased since July (See my Vancouver Housing Breakdown for Dec 2016 here).
- Assessments and tax increases are not a linear relationship. Your property increasing in value by 40% based on the tax assessment doesn’t mean that your property taxes will be 40% higher. There is something called mil rate. The mill rate is a factor which goes up and down to even out the price fluctuations. The mill rate (factor) is multiplied by the value of the home to achieve the taxes that the city deems it needs. The City uses this factor to achieve the rate increases to pay for their budget. Usually 3-5% per year. Your taxes will be very close to the amount that the city has earmarked.
- Typically your tax assessments are 10-15% lower than the actual value of the property. That’s done for a reason. City Halls all over Lower Mainland don’t want to have angry homeowners at their footsteps demanding their property assessments to be lowered. However, due to the decrease in home prices in recent months your 2017 tax assessment might be very accurate.
In conclusion, huge increases in B.C. property assessments don’t necessarily mean huge property tax increases for the homeowners. No need to panic. Based on the changes in the real estate market most property assessments are outdated.