Keeping property assessments in perspective

When homeowners receive provincial property assessment notices, some will smile and have a bit more spring in their step, feeling the assessed value is accurate or perhaps even overly positive.

Others will wilt and lament a modest gain or even a decrease in the assessed value over the previous year or period. Reactions will of course vary factoring in the potential increase in property taxes that tends to come along with stronger assessments.

The reality, setting aside taxation concerns, is that neither parties’ emotions should be tied to the ‘value’ printed on these notices.

A provincial property assessment is an approximate value based on the (broadly) estimated market value as of the previous year. There is a lag time between the estimation of valuation and delivery of the envelope.

It also fails to involve a formal site visit or viewing of the inside of the home to consider either significant upgrades or significant deterioration.

To put this in perspective, few lenders will work with a detailed official appraisal report that is even 90 days old.

Most prefer a report completed within 30 days, as markets can move significantly month over month.

For these reasons, among others, a provincial property assessment should not be relied upon as a totally concrete indicator of value for the purposes of either purchase, sale or financing.

Always enlist a licensed professional, or perhaps even two or three, in order to get a timely and detailed appraisal of current market value.

This will provide a much more accurate reflection of current market values reflecting recent comparable sales, value for zoning, renovations and/or other unique features to the property.

An appraiser is an educated, licensed and heavily regulated third party offering an unbiased valuation of the property in question.

Think of your provincial property assessment as something akin to a weather forecast spanning far larger and more diverse areas than the unique ecosystem that is your neighbourhood, street, and specific property.

The forecast may call for rain in your city, yet you might have a ray of sunshine radiating upon your street specifically.

Jean-Guy Turcotte is a mortgage broker with Dominion Lending Centres – Regional Mortgage Group in Red Deer.

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