Homeowners in 'shock' eye assessment appeals
Some homeowners are in panic mode after receiving property assessments in the mail this month showing huge jumps in their valuations.
And more of them than usual are in a mood to fight back.
That's the take of Steve Miller, a senior appraiser at Bakerview Realty Appraisals, which handles assessment appeals across the Lower Mainland.
"There's just a sense of shock and disbelief among the public with respect to assessments right now," he said. "The inquiries are probably up 700 or 800 per cent in terms of people asking our opinions of whether it's worth pursuing an assessment appeal."
Mostly, Miller has been talking them down from the ceiling, explaining that the valuation set by B.C. Assessment may very well have been an accurate snapshot as of July 1, as that was before the foreign buyers' tax took effect in August and had a cooling effect on the market.
Miller cautions that paying money for a retroactive appraisal to fight an appeal is unlikely to pay for itself through lower property taxes if it only results in a valuation drop of $100,000 or so.
"Your savings in tax for every 100,000 is not immense."
RELATED: How to file an appeal
B.C. Assessment said the typical increase was 30 to 50 per cent, depending on the neighourhood and other factors, for detached houses in most urban parts of Metro Vancouver and the Fraser Valley.
And some homes have seen increases well over 50 per cent.
"I think they may have been a little too aggressive this year, thinking the market was going to potentially continue rising," Miller said, adding he was "really shocked" when the assessments came out.
"I imagine their switchboards are lighting up like a Christmas tree."
But B.C. Assessment spokesman Tim Morrison denied there's any sign yet of a groundswell of assessment appeals.
"It's not much different than any other year," he said, adding BC Assessment won't have hard numbers until after the month-end deadline to file an appeal.
"We've always, consistently, year after year after year, been below two per cent in terms of the number of property owners who actually appeal," Morrison said. "I would expect the trend to continue this year."
Higher values don't automatically trigger higher taxes
Heightening the anxiety of homeowners is the incorrect assumption that any big jump in assessed value automatically translates into much higher property taxes as well.
Industry experts like Miller say that misconception has fueled this year's sense of panic.
In fact, any municipality where assessments have jumped 40 per cent is almost certain to significantly reduce the actual residential property tax rate, which may result in most homeowners paying roughly the same tax or only slightly more than in previous years.
"Yes, my property's worth more, but it doesn't necessarily mean I'm going to pay more taxes," said Steve Blacklock, B.C. president of the Appraisal Institute of Canada.
Where property tax bills can go up significantly is if the assessment is up dramatically more than the municipal average.
Also potentially hit this year are owners of homes that soared well past the $1.2-million threshold for the homeowner grant. They would no longer qualify for the property tax credit of up to $570 for those under 65, or $845 for seniors, but Finance Minister Mike de Jong indicated Monday an adjustment in the threshold is coming.
Blacklock notes anyone can lodge their own appeal, and may find all the ammunition they need by checking B.C. Assessment's E-value BC website for the recent sale prices and assessed values of similar local properties.
Filing an appeal request by the Jan. 31 deadline gives the homeowner a hearing with the Property Assessment Review Panel in February or March. If dissatisfied with their decision, a further appeal is possible to the Property Assessment Appeal Board.
Blacklock says homeowners who appeal need to make sure they have an "evidence-based presentation" that deals only with issues of value and relative equity, and not complain about potential property tax impacts.
Nor is the imposition of the foreign buyers' tax a basis for challenging assessments as of July 1, according to the appraisers. Subsequent policy changes will influence the values determined next July 1, according to B.C. Assessment.
Real estate industry expert Rudy Nielsen, president of Landcor Data Corp., says home owners who intend to sell in the next year or two shouldn't challenge a high assessment, because it should help deliver a higher selling price.
"Don't touch it, keep it high," he said.