Property Tax Assessments

Property Tax Assessments
 
(January 05, 2017 )

 

Property tax assessments have been mailed out this week and homeowners throughout the Lower Mainland are being hit with huge increases in their property assessments, many are up 30%-50%. The property tax you pay is partially based on what the government believes your property (buildings and land) is worth. In most cases, the value is an estimate of your property's value as of July 1 of the previous year. To determine the value of your property, an assessor compares your property to actual sales in the same area. Some of the characteristics the assessor compares are:
* Location
* Age and condition of buildings
* Property size
* Land topography
* Shape
* How the land is used
The assessed value is then used to calculate your share of municipal taxes. Your municipal government sets its budget for the year. It divides that budget into the total assessed value of all the properties in the municipality. The result is what’s called the Mill Rate. 

The mill rate is expressed as X amount of dollars of taxes per year per $1,000 of assessed property value. It’s possible that you may not see a tax increase from a higher assessment if the the mill rate for your municipality is down but that’s not likely the case as most governments love to spend and prices always rise. Also bear in mind if your assessment increases drastically chances are the market value of your house has probably increased as well. Which is good, should you decide to sell.

If you accept the assessor’s opinion of your property’s assessed value, the calculation of the actual property tax is automatic. You can appeal the assessed value of your property, but not the property tax itself. 

If you think the assessment is too high, you can check with B.C. Assessment http://www.bcassessment.ca/ as most concerns can be resolved through discussion with their staff. You will have to produce evidence that shows the assessor made a mistake. If you are still not satisfied after discussing your concern with them, an independent appeal process exists to have your assessment reviewed. The first level of appeal is to the Property Assessment Review Panel (PARP). It’s important to note that the deadline to appeal your 2017 Assessment is January 31, 2017.

Property Assessment Review Panels hear assessment complaints between February 1st and March 15th of each year.  For owners who are not satisfied with a panel decision, a second level of appeal is to the Property Assessment Appeal Board (PAAB).

The B.C. Home Owners Grant
The grant is a tax relief to home owners that are residing on the property being taxed. It is not applicable for investment property. It offers $570 (or for northern and rural areas, up to $770) to homeowners of properties with an assessed value of less than $1.2 million. The amount was at $1.1 million last year but the provincial government increased it because of rising home prices. As of this writing there is talk in the media about raising it again but so far that hasn’t occurred. The Finance Ministry says the grant covers 91% or more than one million homes in the province.

Tax Deferment
It may be possible to apply to defer all or part of your property taxes, with interest. Consider it a loan from the province. There’s legal fees, it’s not very easy and it’s certainly not fast. You’ll find more info here:
http://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/pay/defer-taxes
*Important to note that tax deferment is a very last resort because if the province pays your unpaid property taxes on your behalf you'll have a restrictive lien registered against your property and you must pay the full outstanding balance before you sell.
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