Assessed Value vs Market Value
The 2019 Tax Assessments have just come out. If you’re thinking of selling, be really careful to not use your Assessed Value as an indication of Market Value. There are lots of things that the Assessed Value does not take into account, like whether you’ve done recent renovations, or whether you need them.
One of the most thrown around stats on a property is the assessed value. For those that don’t know, the assessed value of a property is the value given by BC Assessment to a property to determine the basis for property taxation in our province. In other words, they give each property a dollar value in order to decide who pays more tax.
The assessed value should not be confused with market value. Market value is the amount in which a willing Buyer pays for a property. As soon as somebody purchases a property (assuming it has had sufficient time on the market), they have established the market value for that property, as well as to a lesser extent other properties that are similar.
Market value is established by many people coming through a specific property and deciding how much they would pay to live there. Market value takes into account the area, exterior, strata corporation, as well as other factors to determine the price. Here are some reasons why they differ:
- Assessors for BC Assessment do not go inside your property, so how can they accurately obtain the value of your home? We can all agree that the inside of your condo/house is just as important as the outside. For example, what if you have solid gold countertops worth a million bucks inside? I doubt the assessed value would reflect that.
- Assessed values can be challenged by property owners and changed. If it can be changed, then it’s not an accurate representation of market value. There is only one market value.
- The assessed value is determined once a year. A lot can change in a year. I recently sold a condo for 25% more than the assessed value. The condo was getting a complete renovation when the assessment came, and almost a year later it no longer reflected the value of the property.
So, let’s take a look at a couple of our recent sales from this year and compare the market value with the assessed value.
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