Why property assessment value is not the sale value of a home
It is 2016 and with the new year comes the new city assessment. Last year, in 2015, we personally were looking at a 27% hike on our property value. While digging into the assessment search that the City of Calgary has opened, we noticed we were compared with 260 other properties. We fought it, and won. It was an interesting experience to be in a court-like setting and defend our property value. But with the right comparisons, we could make it very clear that the 27% was a ‘bit much’.
If you want more information on sold prices of homes in your Calgary community, so you can appeal your assessment yourself, fill out this form and receive sold data in your Calgary community.
To access your property assessment information. You can search and verify your property information. You will need the access code on your 2016 property assessment notice. Login at Calgary’s Assessment Resource. If you want to get more information on the process of appeal, please contact us.
Don’t compare the sale value with the city assessment
At times, we meet people who want to sell their home and want to use the value on their property assessment to determine the selling price of their home. We also meet buyers who compare the asking price of a home with the property assessment by the city of Calgary.
However, your property tax assessment reflects the estimated market value of you property on July 1st of the previous year, and the home’s physical condition as of December 1st, the year before.
The City of Calgary uses mass appraisal techniques to determine your property assessment, under the market value standard. The definition of market value is the most probable price a property would sell for, on the open market as of July 1 (the year before), as a validation date.
To determine the market (assessed) value of your home, the city of Calgary uses one of three ways, depending on the type of property:
• The Sales Comparison: meaning the sales of similar properties
• Income: capitalize the income being generated by the property, when it is a rental
• Cost: land value, plus the depreciated replacement cost of the improvement.
In Calgary, the sales comparison approach, the first one mentioned , is the one most used by the city of Calgary, to determine the value.
Clearly, looking at the city assessment to determine a selling or buying price for a home will most likely not be accurate, as the numbers used are based on July of the previous years.
What is also important to understand is that realtors also look at the curb appeal of a home and the maintenance inside the home. The City will not look at the fact that a home might be dirty, is outdated or that the walls have been painted purple, all situations that would impact the market value, assessed by a realtor.
If you are thinking of selling your home and want a current market evaluation (CMA) of your home, contact us by phone or fill out the following contact form.
We also wrote a good read about setting a good asking price for your home.