The unprecedented fluctuations in the market values during covid-19 made buyers wonder why BC property assessments are so different from the market pricing. Some buyers consider the trustworthy source but forget that BC property assessments are made at one point in time and never meant to represent changes in the market.
What is the BC Assessment value?
Each year, the British Columbia Assessment (BCA) analyzes property values across the province in order to determine the value of homes and this is used as the basis for property tax calculations.
Assessments are the estimate of a property’s market value as of July 1, 2022 and adjusted for physical condition and zoning as of October 31, 2022. The market value is used because this method has been elected as the most fair way to distribute property tax burden.
BC Assessment Value vs Market Value
BC Assessment carries out assessments on the same dates across the province in order to be fair since the main goal is for determination of property tax. However, this publicly available assessment is also used for determination of market value by appraisers and estimators for a variety of reasons (equity determination, loan risk or loan-to-value ratios, listing prices, etc.). The appraisers and estimators do not have a standardized approach in their estimates and this causes confusion.
Clearly, BC Assessment property values are NOT the same as current market values because it is taken at a singular point in time and does not reflect current market changes.
Is my BC Assessment value a good indicator of my current property value?
BC Assessment property values are a great method of communicating a standard baseline value. It can be used as a component in arriving at estimates like listing price, current market estimates, loan-to-value ratios, et cetera; However, BC Assessment values should only be used as one component in the determination of property value. Of course, assessed values can be similar or the even the same as market values in a slow moving market but lately, this has not been the case. We have seen some appraisals rely primarily or solely on BC Assessment values…but this is too simplistic and generally poor guidance.
Does BC Assessment values predict future property value trends?
BC Assessment values are a lagging indicator and only a reflection of market prices at one point in time. A singular sample in time is never a statistically good indicator of any trend over time. However, there is an emotional influence over how buyers or sellers feel about their property values and this will naturally affect how parties negotiate.
If you are wondering what the market value of your home is. Contact us today for a free market evaluation 604-341-9937 or [email protected]