Property Assessments?
How do Property Assessments Work?
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 this 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 realtors market value assessment is typically current. In our active local market, six months can mean many thousands of even tens of thousands of dollars.
How: BCA has a database of 1.781 million properties. When a new property is created through zoning and construction, or when an existing property changes, a BCA appraiser visits the site and looks at 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 values by evaluating prices for homes sold in each neighbourhood, or of similar units in a strata complex as of July 1, and then applying the information 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 the 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 realtors value will be similar, assuming a stable market.
Difference will more likely occur in neighbourhoods where every lot on every street is different, every home's architecture is unique and every view distinct. Differences also occur when property owners make changes such as renovations, that 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 the changes in assessments. Municipal budget requirements dictate the taxes raised by each class. Just because your assessment increased doesn't necessarily mean that your property tax will increase by the same proportion.
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