COLUMN: Home assessment jump doesn't always mean a big tax increase
On the hook for a whopping property tax increase this year?
There’s often confusion about how, exactly, one’s property assessment translates into the actual bill that gets mailed out in May.
Many of us gather eagerly round the BC Assessment envelope when it arrives in January to see the numbers. For many, the trend has been a continuous rise in recent years.
For a few moments we might scan the numbers (with all those zeroes) and imagine jumping into a pile of money. It might even feel as though, somewhere along the line, we’ve done something unspeakably wise. Some might ponder selling the shack, unloading the big-screen and sofas on craigslist and de-camping to a Thai beach for the rest of their days.
But then the daydream ends, and with it the realization that a big jump in assessed value can translate into a hefty increase in property tax.
The operative word, though, is can. For those owning a home in New Westminster—be it a detached house, an apartment, townhome, or even an empty lot—the average assessed value in 2012 increased by 5.16 per cent according to BC Assessment. (Burnaby: 12.18 per cent; Richmond and Vancouver: 16.4 per cent; Surrey: 7.8).
The key question is: How much did yours go up?
If it was the average—5.16 per cent—your actual tax bill will only change by the budgeted increase decided at city hall (New West is looking at a two per cent hike for 2012).
But if the assessed value jumped much more than average, your bill will show a correspondingly higher increase. And accordingly, if your increase was less than 5.16 per cent, your bill won’t even increase by that two per cent. If it actually went down, well, you’re laughing, aren’t you?
Each year, cities use the assessment roll to calculate the tax rate, called the mill rate. Last year, for residential properties, the mill rate was 3.613, which meant for every $1,000 in assessed value, you paid $3.63. Hence, a home valued at $700,000 paid $2,529 to the city in tax. Add school tax, and fees to Metro Vancouver and TransLink fees and that number was much higher.
Each year, a new rate is set because, even though home values may have gone up 10 per cent, for instance, the city doesn’t necessarily need to collect 10 per cent more cash.
In New West in 2012, single family homes in Queen’s Park and Queensborough, in particular, have seen larger than average increases in their assessments, as did low rise apartments, according to BC Assessment.
An interesting trend in New West this year has been the sharp increase in assessed values for retail and other business properties, also known as class 6.
Values increased by 15.43 per cent in 2012. In Metro Vancouver, only Pitt Meadows posted a larger jump at 23.79 per cent.
So again, for business owners: If you’ve seen an average increase this year, your bill won’t change much.
Zina Weston, deputy assessor with BC Assessment, said some of the largest jumps for business/retail came in the Columbia Street area.
“The appraiser mentioned Sapperton, 12th Street and Uptown all in the 10-15 per cent range, and Downtown saw the largest market movement, in the 15 to 25 per cent range,” she told me. “It’s a factor of sales activity, and the prices that generates.”
In the end, an assessment must seem fair.
If you don’t think yours is, you’ve got until Jan. 31 to appeal.
• Chris Bryan is editor of the NewsLeader.