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By now, you’ve probably received your property tax assessment in the mail. You may have mixed feelings about the large increase we’ve seen in property values lately, so I want to dispel some common misconceptions about property tax assessments.
A lot of people assume any increase in their assessment will equate to the same increase in their property taxes. In other words, if their property’s value goes up by 20% in their assessment, then they’ll see the same 20% jump in their property taxes. That’s not the case, though. How property tax assessments are done is a little more complicated than that.
Assessors also take into consideration how well your neighborhood performs in comparison to the average. If the average home increased in value by 15% and your home increased by 20%, you may see a property tax increase. If your home increased by only 10% compared to that 15% average, though, you may see a decrease.
If you’re curious how your neighborhood stacks up against other neighborhoods, you can check out our recently released Vantage Report, which goes through the price increases of each neighborhood in our area.
If you disagree with your tax assessment and want to protest it, you need to know what your plan is regarding your home. Will you be living in it for the next five to 10 years? If that’s the case, lowering your assessed value would save you a couple thousand dollars in taxes over that time period. A $50,000 decrease in your assessment equates to saving roughly $220 per year.
It also might make sense for you to argue that your property tax assessment should be higher if you plan on selling within the next year or two. You don’t necessarily get more for a home because it has a higher assessed value, but if you’re trying to achieve a price that’s much higher than what your assessed value is, having an assessment that correlates more closely with where you believe your home’s market value is certainly wouldn’t hurt.
Lastly, what’s the difference between an assessment and an appraisal? These two words get interchanged quite a bit in the real estate world, but there are a few major differences between them.
"You don’t necessarily get more for a home because it has a higher assessed value."
First, an appraisal involves someone physically coming into your home—the BC assessment office has never been inside your home. An appraisal is actually trying to find the market value of your home, whereas an assessment is trying to calculate, on average, what your home would be worth based on how much home you have and how big your property is.
The other big difference is assessments typically rely on data that’s up to a year old (or even older), while an appraiser has to use data and sales recorded within the last 90 days.
In short, an assessed value is used to calculate your tax rate, and an appraised value is used to calculate what your home is truly worth and would sell for in today’s market.
If you have any more questions about your tax assessment or you have any other real estate needs, don’t hesitate to reach out to me. I’d be glad to help you.Posted by AJ Hazzi on