What’s a property worth? Property assessment notices are here

Property owners throughout BC received their 2012 assessment notice the first week of January from BC Assessment (BCA).

This notice is BC Assessment’s estimate of a property’s value as of July 1, 2012, and for new construction or substantially renovated homes, the physical condition as of October 31, 2012.

BCA is the government agency responsible for determining and reporting property value estimates for the 1,935,426 properties in its database, a 0.92% increase in the number of properties since 2012.

BC Assessment and a REALTOR® assessment. Why the difference?

BCA’s assessment and the market value determined by a REALTOR® may be different. Why?

Both BCA assessors and REALTORS® calculate market value by analyzing sales of comparable homes within a local market, and look at factors that affect value such as size of home, view, location – on a busy or quiet street, number of bedrooms, construction quality, floor level, and garage or parking stalls.

Where every lot and every home on a street are typically the same, both BCA’s value and a REALTOR’s® value will be similar during stable market conditions.

Differences occur in neighbourhoods where lots have been rezoned or are different shapes and sizes, where architecture and views are unique, and where owners have made changes that BCA hasn’t yet taken into account.

Differences also occur during market instability when prices rise or fall during the six-month period between July 1 and January 1 of the following year.

Property values stable

Since July 1, 2012 home owners may have seen prices stalling in some neighbourhoods and rising in others. BCA reports that the majority of residential homeowners will experience an assessment change of less than 5% compared to last year’s assessment roll.

The deadline to appeal an assessment is January 31, 2013

Property owners who disagree with their assessment should do their homework by visiting www.bcassessment.ca and then e-valueBC to compare their assessment with those of their neighbours. Each year, typically less than 2% of all BC property owners appeal their assessment.

Property owners should first contact their local assessment office and talk to staff who can make adjustments if there is an obvious error, for example if BCA included a complete renovation, when it was merely a spruce-up.

Area assessors’ phone numbers

Property owners who decide to appeal must complete a Notice of Complaint (Appeal) form and file it by January 31, 2013 at 11:59 p.m. For information, visit www.bcassessment.ca and select Property Assessment Review Process. Then select Property Assessment Complaint Process – Step-By-Step Guide.

What can a successful appeal mean for a property owner?

If a property assessment decreases, property taxes may potentially also decrease.

BCA determines the assessed value of a property for tax purposes. The taxing authorities – both local and provincial governments – set tax rates each spring according budget requirements. The tax rate is used to determine the amount of property tax that must be paid, based on the assessed value of a property.

The tax rate applies to each $1,000 of net taxable value. The formula for calculating taxes on property is:

Tax Rate x Assessed Value / 1,000

If the tax rate for residential property is 4.01, taxes of $4.01 are charged on every $1,000 of assessed value. Residential property valued at $1,000,000 will have property taxes of $4,010 ($4.01 x $1,000,000/1,000).

No assessment notice

Property owners who haven’t received an assessment notice by mid-January should contact the area phone numbers listed above or visit www.bcassessment.ca and select Questions about your assessment? (Far right-hand side) or by phoning 1.866.825.8322.

If a property owner has concerns about their local taxes, they should contact their local government office. Taxes aren’t appealable.

New features

New features on the BCA website at www.bcassessment.ca include:

• Assessment roll total value by area and property class.
• Provincial median sale price to November 2012 for single family residential and for strata residential.
• Photos (thumbnail size) for some properties from communities where BCA has been working on its Property Photo Update initiative.
• Top 200 Valued Residential Properties in all of BC.
• Top 100 Valued Residential Properties in Vancouver Sea to Sky assessment region (Includes Vancouver, North Vancouver City & District, West Vancouver, Squamish, Whistler, Pemberton, Bowen Island, Sunshine Coast).
• Top 100 Valued Residential Properties in North Fraser assessment region (Includes Burnaby, New Westminster, Coquitlam, Port Coquitlam, Port Moody, Anmore, Belcarra).
• Top 100 Valued Residential Properties in the Fraser Valley assessment region (Includes Maple Ridge and Pitt Meadows).
• Top 100 Valued Residential Properties in the Richmond/Delta assessment regiona (Includes Ladner and Tsawwassen).

As a seller, your #1 goal is to sell your home in a timely fashion, at the best possible listing price.  In today's market, where there is much more competion, it is important to put your best foot, or in this case, home forward because first impressions are critical.

Many of today's prospective homebuyers have busy lifestyles and are looking for properties that don't require a lot of work..  Therefore a home in move-in condition is much more attractive.  Before placing your home on the market, you may want to invest in making needed repairs.

To get started, inspect both the inside and outside of the home.  Take inventory of practical and aesthetic repairs.  You may want to apply a fresh coat of paint on the walls, doors, and shutters.  Clean the carpet  and buff and polish wooden floors.  Tighten and polish hardware.  Repair cracks in sidewalks and driveways, and clean any stains on them.  Replace missing or warped roofing.  Clean or re-grout kitchen and bathrooms.  Repair dripping faucets and drains or plumbing fixtrures that aren't operating.

Fix sticking doors and replace old locks and doorknobs.  Replace old bulbs and broken electrical sockets.  Replace cracked windows and torn screens.  Repair broken fencing and reseal the deck.  Clean up stains on tiles and countertops.

Some experts also recommend hiring a certified  home inpector to thoroughly and impartially evaluate the property.  (For a list of inspectors in your area, vist the Canadian Association of Home Inpectors website, www.cahpi. bc.ca, or click here).  A standard report will review the condition of the home's heating system, central air conditioning, plumbing and electrical systems, the roof, attic, walls, ceiling, floors, windows and doors, the foundation, basement and visible structure.  Standards of practice can be found on our website: Standards of Practice.

If there are recommendations for improvement, consult with your real estate professional in prioritizing the list of repairs.

Depending on your goals and budget, you may want to repair only items that could cause significant deterioration to the home, such as a leak.  In addition, your local market conditions may dictate how extensive your repairs need to be.  Let your budget and your real estate professional guide you.

However, be careful about major items.  Sellers rarely recoup money on major remodeling projects, and you may want to save funds for your new home.

A home in good condition demonstrates pride of ownership.  Taking the time to make small repairs to your home can go a long way in making sure your home is presented to potential buyers in its best possilbe light.  They also just might make the sale.

It is important to note that In British Columbia, property assessments, typically mailed in January, reflect market values effective July 1 of the preceding year.

In general terms, market value is the price expected if a reasonable amount of time is allowed to find a purchaser and if both seller and prospective buyer are fully informed. For assessment purposes in British Columbia, market value is the most probable price that an unencumbered property would sell for on the open market on July 1st.

The annual assessment process is often a confusing one for many commercial and residential property owners.  Typically there is a difference between the property value assessment on the assessment notice and the current market value as determined by a REALTOR®.

This difference is a result of two factors.  The first factor involved BCA’s mass appraisal system, which calculates property value by evaluating prices for homes sold in each neighborhood or for units in a strata complex and then applies the information to arrive at an assessed value.  This information is typically obtained from MLS sales, NOT by visiting the properties in question.  The variables BCA uses to calculate this value include house type, square footage, age, heating, property classification or use, and additions or demolitions of features such as garages, sheds, pools and spas.

The second factor depends on the time at which a property is assessed.  Normally, a 2013 assessment notice is BCA’s estimate of a property’s market value as of July 1, 2012, whereas a REALTOR®’s market value reflects the current state of the market, not the market six months ago.

“Market value assessment” is widely considered to be the fairest system for distributing the property tax burden.  As the real estate market can change very quickly, depending on an historical assessment (July assessment for next year’s tax purposes) expecting Assessed Value to be an accurate indicator of market value can be erroneous.

For those of you who are considering the sale of your home this year, or for your "future reference" file, we thought we would pass on some tips about making needed repairs before putting your home on the market.

A home in move-in condition makes selling a home as quickly as possible, for the maximum price much easier.  We cannot say enough about how a clean, uncluttered home in "showable" condition has made a difference in the amount of time on market and the price attained.

Many of todays prospective homebuyers have busy lifestyles and are looking for properties that don't require a lot of work. Homeowners should be proactive by making (often minor) needed repairs before listing their property.

Inspect both inside and outside the home. Take inventory of practical and aesthetic repairs. You may want to apply a fresh coat of paint on the walls, doors, and trim.  Clean the carpets and/or buff and polish wooden floors.  Tighten and polish hardware. Repair cracks in sidewalks and driveways, and clean any stains on them.  Replace missing or warped roofing.  Clean or re-grout kitchen and bathrooms.  Repair dripping faucets and drains or plumbing fixtures that aren't operating; powerwash the exterior depending on time of year.

Fix sticking doors and replace old locks and doorknobs.  Replace burned-out bulbs and broken electrical sockets. Replace cracked windows and torn screens.  Repair broken fencing and reseal the deck.  Clean up stains on the tiles and countertops.

Remove as much personal and day-to-day clutter as possible, and store neatly.  Invest in some Rubbermaid containers!  As a bonus this will make your ultimate move that much easier.

Depending on your goals and budget, you may want to repair only items that could cause significant deterioration to the home, such as a leak.  In addition, local market conditions may dictate how extensive repairs need to be.  Let your budget and us, as your real estate professionals guide you.

However, be careful about fixing up too much.  Sellers rarely recoup money on major remodeling projects.  Visit the CMHC site at  link for some samples reports on Cost vs. Value.

A home in good condition demonstrates pride of ownership.  Taking the time to make small repairs to your home can go a long way in making sure that your home is presented to potential buyers in its best possible light.  They also just might make the sale.

We would be delighted to speak to you about this, or any other real estate related matter.  We are looking forward to another very busy year !  Call us anythime at 604-984-7253.

THE BOTTO TEAM