What’s it worth? Assessing a home!

Property owners throughout BC received their 2006 assessment notice earlier this month.

Realtors are often asked why the assessed value on the government assessment notices is frequently different from the property value determined by a realtor.

What accounts for this difference?

1. BC Assessment (BCA), sends property owners a Property Assessment Notice each year. The notice contains BCA’s estimate of the market value of the property as of the previous July 1, which means values lag by about six months. The purpose of the information is to create the Assessment Roll, used by local governments to levy property taxes.

2. BCA has a database of 1.75 million properties. When a new property is created through zoning or construction, or an existing property changes, a BCA appraiser visits the site and looks at the lot size, the structure and other factors such as whether the property is on a quiet street with lanes or a busy boulevard. To update values, BCA appraisers don’t visit each property annually. Instead they use a mass appraisal system. Values are calculated by evaluating prices for homes sold in each neighbourhood around July 1 and then applying the information to get an average price. BCA also uses a broad range of variables for each property. These include lot size, house type, square footage, age, type of heating and whether there is a garage.

When a realtor determines a property value, they scrutinize the most recent comparable data for homes sold in a neighbourhood using the MLS®. They 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 is generally the same, both BCA’s value and a realtor’s value will be similar. Differences will more likely occur in neighbourhoods where every lot on every street is different, every home’s architecture is unique and every view is distinct.