Property Assessments vs Market Value
A new year comes new assessments, BC assessments have now mailed out over 286,000 to homes in the Thompson Okanagan.
With the real estate market in the Okanagan as robust as it has been " total assessments increased from $159.3 billion in 2021 to $204.2 billion this year. " Around 3.3 Billion of the increases can be attributed to new homes/builds and subdivisions. But what many property owners in the Okanagan can expect is their increases to be around 30% this year.
But what is the difference between market value and assessed value? Can you rely on the assessments for accurate estimation of the value of your home?
The simple answer is no you can't, it is a good indication of rough property value however, not indicative of the current market or even oftentimes aware of improvements to your home.
1. The main issue is the delay in time from when they come up with the assessed value and you receive it. The date on the valuation is as of July 1st, 2021 which means 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. From looking at the total sales in the Central Okanagan this past year, there has been $6 Billion of sales, albeit its not a perfect comparison as it includes agricultural land that is exempt from a portion of property taxes and also includes multiple sales of the same home which would double count. However, comparing the sales with the total assessed value only 2.9% of the values of homes transacted this past year, without taking into account difference in market and assessed values over the last 6 months. Another issue is the assessed value is not necessarily aware of any improvements to your home. If you put in new flooring or did a major renovation if you didn't take out building permits, they are likely not aware of the improvements and even if you did the permit value may not be reflective in the total increased value.
2. 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.
Another discrepancy with assessments is with Agriculture land. With Agriculture land, they only assess the home and 1 hectare of land, therefore those values really do not apply to the greater portion of land out there. If you want more information check out last year's video of the differences.
Have a great week and don't hesitate to reach out if you need anything!
Schedule a no-obligation home evaluation here. Let me know if there is ever anything I can do for you.
-Mark
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