With a new year comes new assessments, BC assessments has now mailed out over 283,500 to homes in the Thompson Okanagan. But what is the difference between market value and assessed value? Can you rely on the assessments for an accurate estimation of the value of your home? In this video, I give you a baseline of what you can use to value your home compared to assessment as of right now.
The main issue with using assessment values compared to market value is that they are lagging indicators of the value of your home. The date on the valuation is as of July 1st, 2020 the value you are getting is already 6 months old once you receive it in January. A lot can happen in 6 months and we definitely saw it this year.
The second major issue with using assessments as a comparison is the assessed value is not necessarily aware of any updates or upgrades to your home. If your home has not sold ever, your assessed value will likely be much lower than neighbours that have sold in the last few years.
Or maybe you spent $50,000 and put in a new kitchen, unless permits were pulled for everything you did there is a good chance that BC Assessments is not aware of those improvements. Generally speaking, the return on investment for a new Kitchen can range from 100-200%. The market value of your home might have gone up $100,000 from that investment but your assessed value wouldnt have changed.
On the flip side, your foundation could be crumbling and there is a good chance that your home's market value could be less than the assessed, as the assessed is making an assumption of normal upkeep and maintenance but does not account for lack of maintenance.
But realistically you don't want a higher assessment value, all a higher assessment means you are going to pay more in property taxes depending on the municipality tax rates.
This year they valued 1% more homes and properties than in 2020 which includes $2 Billion in new construction, rezoning, and new subdivisions. Assessed values in the Thompson Okanagan totaled over $159 Billion this year which saw an overall increase of 4%.
Kelowna for the most part saw an assessed values increase of 3%, West Kelowna 4%, Lake Country 7%, and Peachland of 3%.
That is comparing July 2019 to July 2020, however, where are we today in January 2021?
After valuing a home earlier this week and looking at the new assessments it appears the real estate market is anywhere from 4% to 7% above these new assessments. It is tough to know for sure without comparing one home to a similar home that had sold but could be used as a rule of thumb. There was a home that had some updates and hadn't previously sold and it sold for 17% over assessed value.
The top 100 valued homes were also released, however not on the list was a home that just sold last month for over $20M. The highest assessed value home was at $10,600,000. Check out the full list here.
But how does a home sell for $20M for double the highest assessed home not even make the list?
Take a look at the video to see the home but the as assessments also do not take into account active farmland as long as they are claiming a farm income over $2,500 there is a farm exemption as long as the property is in ALR that they are exempt.
Curious about your home value? Schedule your no-obligation home evaluation here.
Have a great week.
Mark Coons
250-801-0361