The after-effects of a blistering hot real estate market will be felt into 2023, as B.C. Assessment warns property owners to be prepared for a five to 15 per cent jump in their annual property assessments.
Although the market cooled off considerably across the province in the second half of this year, assessment values are still expected to eclipse those of last year, according to preliminary information gathered by the assessment authority.
Assessor Bryan Murao emphasized that assessments are based on market values for similar properties sold up to and around July 1 of this year, a few months after property prices peaked in March and April.
Since July 1, the market has changed as interest rates continue to rise and overall sales volume has declined, he said. “As a result, your next property assessment will likely be higher than what the current market value might be.”
The new assessment notices will be mailed out in the first week of January.
An assessment is an estimate of a property’s market value as of July 1 and physical condition as of Oct. 31.
To determine value, assessors take into account sales in an area as well as the size, age, quality, condition, view and location of a property.
In January 2022, homeowners in Greater Victoria saw their annual property assessments increase by an average of 22 to 35 per cent — something that could happen again this year for some owners, Murao said.
The assessment authority is once again sending early notification letters to a small number of properties around B.C. that could experience an increase or decrease in value outside the normal range — including those facing a 30 to 40 per cent increase or decrease.
Murao said no single region experienced more of an increase than others. “What the market has done is quite smooth across the entire province — you’ve got typical changes everywhere,” he said.
On Vancouver Island, the larger increases tend to be in urban areas, especially where new condo developments have been built, but there are no “hotspots” of note.
Changes in assessed value do not necessarily mean a change to amounts paid in property taxes — what affects individual property taxes are assessment changes relative to the average change in their community. A higher-than-average increase might bring higher taxes, while a bigger-than-average drop might decrease them.
Those who feel that their property assessments do not reflect market value as of July 1 can appeal, but Murao said the assessment authority does not expect to see much of an increase in the number of homeowners challenging their assessments this year.
Each year, more than 98 per cent of property owners accept their property assessments without proceeding to a formal, independent review.
Murao said one of the reasons for the low appeal rate is the public seems to have an understanding of the relationship between assessed values and property taxes.
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