Edmonton Sun headline Tuesday January 5: "House Values Plummit." What, did they have sunstroke or something? Turns out the article is referring to city tax assessments dropping on average by 10% this year and it's one more reason homeowners should not consider their city assessment as having anything to do with market value.
I've written about this before but I still get questions about it all the time. Here's the long and the short of it… the city assesses the value of every property in Edmonton. Then they determine the city budget (which is expected to increase by 5% this year). Your assessment is intended to be relative to the other homes in the city, and it determines how big your share of the city budget is, and therefore how much your property taxes will be. The assessment is supposed to reflect the value of your home in July of the previous year.
Also, just because your assessment dropped does not mean your property taxes will drop. The budget is the budget, and if it goes up, and everyone's assessment drops….you still pay more taxes.
The difference between market value and tax assessment
Your market value is based on recent sales of homes comparable to yours, your current competition, the condition of your home (including subjective elements such as layout, upgrades, style etc), and the current market conditions.
Your assessment is based on style of house (examples: bungalow, bi-level), size of lot, size of house (outside measurements), year built, basement finish, garage, exterior finish, type of roof, fireplaces, and location but none of those subjective elements that make such a difference to home buyers.
In other words, if your next door neighbour has a similarly sized home they will have a similar assessment even though their value could vary hugely from yours based on layout, finishings, condition etc.
So Sheldon\Sara, how do you see the trend this last year? This last 6 months?
How much change and in what direction do you think house prices have moved.
I’m confused. Some people say down 10% a year for the last two years, some people say the prices have been going up.
I can’t afford to speculate on property, but I am glad I have a home – I’m also glad we bought it in May 2005.I don’t really care what it is worth, but I’m glad its worth more than I paid if you know what I mean.
Hi Richard… just scroll down the stats are in the next article. If you want a copy of our year in review report coming out on Friday click the “Get updates by email” link in the header.
Because of recession, the cost of the properties have decreased a lot.Yes it is almost 10%. But again it is moving upwards lately.
Hi Guys,
I am wondering how many readers out there who own rental properties, call the City to appeal their tax assessments?
In addition, are you having any success with re-assessments on these rental properties?
Best Regards,
Neil.
well. We bought a house this summer at 13% less than last year assessment, and at 25% less than a year before that. The assessment we received from the city is exactly the price we paid. So it did drop. And yes, it will be no less property taxes compared to the previous year, it just the per cent that you pay at the assessed value is now increased a lot
Since they quoted us that the tax will be about the same, a I gather they increased this fraction by the same 10-13%. I wonder if they ever *decreased* this value, during the times when the prices were going up as crazy. But looks like they only increased their budget.