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BC Assessment vs Home Appraisals

BC Assessment vs Home Appraisals

House Appraisal vs BC Assessment: How They Impact Your Home’s Value

Understanding the difference between residential home appraisals vs BC assessments. These two commonly misunderstood yet crucial home evaluation tools, help to navigate the complexities of the real estate market in British Columbia. While assessments and appraisals both provide property valuations, their purpose, methods and impact on homeowners differ vastly.

Additionally, British Columbia’s ongoing housing crisis adds another layer of complexity. As property values soar and housing accessibility becomes more challenging, understanding the role of these valuations in shaping real estate decisions is more critical than ever.

Key Takeaways

  • BC Assessment provides annual property valuations for tax purposes, while home appraisals offer detailed market value assessments for real estate transactions.
  • Home appraisers conduct thorough interior inspections, whereas BC Assessment typically relies on external data and drive-by observations.
  • Mortgage lenders require professional home appraisals for financing decisions, not BC Assessment values.
  • BC Assessment uses standardized mass appraisal methods, while home appraisers evaluate properties individually with current market conditions.
  • Home appraisals provide more precise and timely market valuations than BC Assessment’s broader, tax-focused approach.

Understanding BC Assessment

Understanding BC Assessment

BC Assessment is a provincial Crown corporation responsible for determining the value of properties for taxation purposes. These assessments are updated annually, reflecting property values as of July 1 of the previous year. BC Assessment employs mass appraisal techniques, analyzing market trends, property size, location, and comparable sales to generate valuations.

Key Features of BC Assessments:

  1. Purpose: Used primarily for calculating property taxes.
  2. Methodology: Relies on external data, comparable sales, and drive-by observations.
  3. Frequency: Updated once a year.
  4. Limitations: It does not account for interior conditions or recent upgrades.

For example, if you’ve recently renovated your kitchen, BC Assessment may not reflect the added value unless the renovation is reported, which impacts the property’s marketability.

The Role of Home Appraisals

On the other hand, home appraisals provide current market valuations and are crucial for real estate transactions, including buying, selling, and refinancing. These appraisals are conducted by licensed professionals who physically inspect the property, factoring in both external and internal conditions, recent upgrades, and comparable sales in the immediate market.

Key Features of Home Appraisals:

  1. Purpose: Used for financial decisions like securing a mortgage or refinancing.
  2. Methodology: Includes a detailed inspection, market analysis, and adjustments for unique property features.
  3. Frequency: Conducted on-demand, typically required for transactions.
  4. Precision: Reflects real-time market conditions with greater accuracy than BC Assessments.

Key Differences Between BC Assessments and Home Appraisals

Purpose:

  • BC Assessment: Used for calculating property taxes.
  • Home Appraisal: Used for real estate transactions such as buying, selling, or refinancing.

Methodology:

  • BC Assessment: Relies on mass appraisal methods using external data and comparable sales.
  • Home Appraisal: Conducts individualized inspections, considering interior conditions, recent upgrades, and current market trends.

Update Frequency:

  • BC Assessment: Updated annually based on a market snapshot as of July 1.
  • Home Appraisal: Conducted on-demand to reflect current market conditions.

Considerations:

  • BC Assessment: Focuses on external data, location, and general trends, often ignoring unique property features.
  • Home Appraisal: Includes detailed market analysis and accounts for specific property attributes, renovations, and upgrades.

Usage:

  • BC Assessment: Primarily for tax purposes.
  • Home Appraisal: Essential for mortgage approval, refinancing, and accurate market valuations.
    Understanding these differences is essential, particularly during a housing crisis where precise property valuation can significantly affect financial decisions.

Impact of BC’s Housing Crisis on Property Valuations

British Columbia’s housing crisis is marked by escalating property prices, a shortage of affordable homes, and high demand fueled by population growth. From July 1, 2022, to July 1, 2023, BC’s annual growth rate was 3%, the highest increase since 1974, yet housing construction has struggled to keep pace.

Addressing British Columbia’s housing crisis requires a multi-faceted approach that combines innovative construction methods with strategic government initiatives. The province is leveraging modular housing and off-site construction techniques to accelerate project timelines while reducing costs and environmental impact.

Accurate new construction appraisals are critical to ensuring these projects receive the necessary financing and market support, as they determine the fair market value of properties essential for securing loans.

The various dynamics have far-reaching implications for both BC Assessments and home appraisals.

Effects on BC Assessments:

  • Lagging Accuracy: based on previous market conditions, BC Assessment values may not reflect the latest property value trends. In a rapidly appreciating market, homeowners could see assessments underrepresent their property’s worth.
  • Tax Implications: Higher assessments can increase property taxes, placing additional financial strain on homeowners during a housing affordability crisis.

Effects on House Appraisals:

  • Rising Market Values: Appraisals are sensitive to current market trends, which can result in higher valuations, affecting affordability for buyers.
  • Refinancing Challenges: Lenders rely on appraisals to determine loan amounts. Discrepancies between BC Assessment and appraisal values can complicate financing in a volatile market.

Why Accurate Valuations Matter in BC’s Housing Crisis

The housing crisis has placed an unprecedented demand on accurate property valuations.

Here’s how each valuation type plays a role:

  • For Homeowners: Understanding the differences between assessments and appraisals helps homeowners make informed decisions about refinancing, selling, or appealing tax assessments.
  • For Buyers: Appraisals ensure buyers pay fair market value, which is especially critical in a high-demand market.
  • For Policymakers: BC Assessment data informs government policies, including tax rates and housing initiatives.

For example, government efforts to streamline zoning regulations and build affordable housing rely on accurate data from BC Assessment to identify high-need areas. However, appraisals provide the precision required for individual transactions to navigate current market dynamics.

Making Sense of the Disparity

Differences between BC Assessment values and appraisals often arise due to:

  • Market Timing: BC Assessments lag behind market conditions, while appraisals provide real-time data.
  • Methodology: Mass appraisals used by BC Assessment are less nuanced than the individualized approach of professional appraisers.
  • Property Details: BC Assessment often overlooks renovations, interior conditions, and unique property features.

These discrepancies highlight the importance of using the proper valuation method for the right purpose. For financial transactions, a professional appraisal is essential.

How D. Fritz Appraisals Can Help

At D. Fritz Appraisals, we understand the intricacies of property valuation in British Columbia’s challenging housing market. Our licensed appraisers provide accurate, detailed reports tailored to your specific needs, whether you’re buying, selling, or refinancing.

Why Choose Us for your Victoria Property Appraisals?

  • Decades of experience in Victoria’s unique market.
  • Comprehensive inspections for precise valuations.
  • Expert guidance to help you navigate property transactions confidently.

As BC grapples with its housing crisis, the need for accurate, reliable property appraisals has never been greater. For trusted, professional appraisal services in Victoria, BC, contact D. Fritz Appraisals Inc.

Whether you’re evaluating your home for a mortgage or seeking clarity on your property’s market value, we’re here to help.

property tax appeal

Need a Property Tax Appeal?

What to do When Your Property Tax Assessment Seems Too High

In early January each year, every home in British Columbia receives its property tax assessment notice through the mail from BC Assessment. Some property owners may be surprised and possibly even concerned with their home property assessment amount.

Between 2021 and 2022, house prices in BC rose by an average of 23.3% with the increase even steeper in Victoria.  With BC Assessments predicting that property assessments will rise between 5% and 15% for 2023, it’s no wonder homeowners are concerned about how these cumulative increases will affect their BC tax assessment.

The good news is, if you think your BC Property Tax assessment is too high, there is an appeals process that you can follow.

Read on for more about how your property tax assessment is calculated, what to do if you think your assessment is too high and how a professional appraisal company can help you with your appeal.

How Do BC Property Tax Assessments Work?

Every year, BC Assessment creates property tax assessments for over 2 million homes in BC. These assessments provide a valuation of each property as of July 1st in the previous year (So 2023 tax assessments are based on the value of homes on July 1st, 2022).

These assessments are used by local municipalities to calculate your annual property taxes. While the actual dollar valuation of the property is not the basis for your tax bill (i.e. an increase in property value doesn’t always mean an increase in taxes), if you’ve seen a larger-than-average increase (based on the average change in home values within your community), your bill could be affected.

BC property tax assessments are calculated using a variety of information sources, including:

  • Land title
  • Real estate transactions
  • Aerial and street view imagery
  • Building permits
  • Property visits

BC Assessment’s team of appraisers take this information and look at it alongside property market data from July 1st. Sales of comparable homes in the local area are analyzed along with specific features of each home to establish market value.

Things that may affect your BC Assessment valuation include:

  • Type of property
  • Location
  • View
  • Size of home in square feet
  • Number of rooms
  • Any recent additions / improvements
  • Age of home
  • Garages / carports / decks
  • Comparable sales prices

Did You Know? Changes to land zoning could impact your assessment. However, if you have owned and occupied your residential property for over 10 years, the valuation must remain based on current use, not potential use of the land. Therefore, any potential development due to zoning changes would not be valued. 

How to Appeal Your Property Tax Assessment

In their 2021 Annual Report, BC Assessment notes it received 4,427 appeals that year, 10% of which were from Vancouver Island. According to the Times Colonist, this number is well below the approximately 20% of homeowners who should be appealing their property assessments each year.

If you think your property tax assessment is too high, there are some steps you should take to decide whether you should appeal.

  • First, use the online assessment search tool to see what other homes in your area, and homes comparable to yours, have been assessed at. The important thing to look at is the % increase. You may find that although your value has increased a lot, it is in line with the average for your area and so there is no case for appeal.
  • However, if you feel your home has increased significantly compared to your neighbours and other comparable homes, then you may have a case for appeal.
  • BC Assessment suggests anyone with concerns should contact them to have an informal discussion with an appraiser. If both sides agree a change is needed it can be done without having to go through a formal appeal process. 96% of cases were solved this way in 2021.
  • If following this initial discussion, you are still not satisfied with the assessment, you can lodge a formal appeal and request an independent review by the Property Assessment Review Panel (PARP). The PARP has the authority to investigate and adjudicate assessments and can make rulings to amend the issued assessment.

Remember: You must submit your appeal by January 31 – late appeal submissions will not be considered.

Once you have submitted your appeal:

  • Appeal hearings take place between February 1st and March 15th. You will receive a notice of hearing time and date. It is important you start to gather support information as soon as you submit your appeal. (See below).
  • PARP may issue a decision at the hearing or by April 7 at the latest.
  • If you remain unhappy with the decision of the PARP you may refer your appeal to the Property Assessment Appeal Board. The deadline for appeals to PAAB is April 30.

How to Prepare Your Supporting Evidence Package

One of the most important things to do after submitting an appeal is to prepare your supporting evidence package. At the PARP panel hearing, you will be given 6 to 10 minutes to present evidence to support your claim that the tax assessment is incorrect.

This evidence package should include:

  • Comparative properties
  • Evidence of real home sales in your neighbourhood 
  • Photographs of your home and comparable properties
  • Evidence of views, condition of the home and any damage requiring repair 

For more information on the appeals process and what to include in your appeal evidence see this useful guide.

How an Independent Appraiser Can Help Your Appeal

The key to a good property tax appeal package is to be concise and include relevant and clear information.

Not everyone has the time or ability to do this, but did you know you can get assistance from an independent qualified appraisal company to create your BC Assessment appeal package? Appraisers are experts in the local market and can pull together comparison information and an accurate valuation to support your appeal.

While an appraisal for the purpose of a property tax dispute is somewhat different to a regular appraisal, because it has to reflect the market as of the previous July, a good appraisal company will be able to help.

Get Support in Your Property Tax Dispute From D.Fritz Appraisals Inc 

At D Fritz Appraisals Inc, we have over 24 years of experience appraising homes in the Victoria, BC, region and consider ourselves to be experts on Vancouver Island housing market conditions.

Not sure whether you have a good case to appeal property tax assessment? For a nominal fee, D.Fritz offers a telephone or online consultation to offer direction on whether you should proceed with your appeal or not.

If you decide to go ahead with an appeal, contact us at D. Fritz as soon as possible to book a time to carry out your appraisal.