Ah yes, it is that time of year again when our tax assessments come out. Tax assessments for properties in the Lower Mainland have, for the most part, gone up – some by a significant amount. Why is this, homeowners wonder? Also, is this good news or bad?

What one has to realize is that tax assessments are based upon property values as recorded on July 1st of the previous year.The reasons that tax assessments have gone up this year is because of the busy spring market we had last year. Last spring we had a very active housing market that saw an increase in the selling price for houses, particularly in West Vancouver, Vancouver, Richmond, and South Surrey/White Rock. As a result, the property values went up on our assessments for this year.

So, is this good news or bad news? Well, it all depends upon your perspective. If you intend to remain in your home, a higher assessment means a higher property tax that you will have to pay to your local government. So many homeowners aren’t too thrilled to see their property value go up. However, if you are listing your house for sale, a higher tax assessment is often seen by homeowners as a means of determining its market value. Good news indeed!

Be careful though. Most buyers work with realtors. A realtor’s job is to show their buyers what the property’s market value is. The assessed value of the home is not typically the best indicator of a property’s value. While the land value of a particular property generally remains stable over time, a home is a depreciating asset unless it is regularly maintained and updated. In addition to the land value, to determine the value of a house one needs to consider its location, the style and size of the home, and any updates that have been made to it over the years. While the assessment authority has information regarding land, location, and size, they do not generally know how well maintained and updated a house is. If the house has been sold recently, they have useful information to use for its market value but otherwise, they have to go on generalized sales and market information.

The most useful information to determine the market value of your home is to look at what comparable homes in your neighbourhood have sold for recently – not a year, or six months, ago. This is the  information that a buyer’s realtor will use to help him or her determine what to offer when buying a house.

So good news or bad news? You decide!