2010 British Columbia Assessment – Two Years of Market Movement

Some parts of British Columbia have seen their 2010 assessed residential property values rise with double digit increases according to the latest figures released by the BC Assessment Corporation on January 4, 2010.

The assessment area with the highest estimated percent market movement for residential properties was, Northwest BC at 10.16% according to the BC Assessment – 2010 Assessment Roll.

In British Columbia, BC Assessment operates as an independent, Crown Corporation, governed by a Board of Directors accountable to the Provincial Government of BC under the legislation of the BC Assessment Act.

BC Assessment divides the province of British Columbia into 171 municipalities and jurisdictions, 10 regions and 19 Assessment areas. Information and statistics is most readily available and published based on the 19 Assessment areas.

According to the BC Assessment – 2010 Assessment Roll. The “Estimated Percentage Market Movement” for residential properties in the 19 Assessment areas is as follows:

BC Assessment Area – 2010 Estimated % Market Movement:

According to the BC Assessment website, it’s mandate is “to provide a stable and predictable base for real property taxation in British Columbia. The corporation determines ownership and tax liability, classifies and values each property in British Columbia”.

This is done to provide a fair and equitable base for property taxation that is done by local taxing authorities at the Municipal, District and Provincial levels of Government. These local taxing authorities use the BC Assessment figures to set a tax rate (mill rate) that is applied to the properties in order to determine the individual ratepayers tax burden.

BC Assessment completes a yearly “Assessment Roll” on December 31 of most properties based on a market value approach. The value is based on sales data in the properties subject area between January 1 – October 31 of the previous year and stipulate the properties valuation date as of July 1.

Property values are an estimation that is determined by local market conditions through sales data and other contributing factors.

However, these assessments can only be viewed as a lagging market indicator as the 2010 Assessment Roll is actually based on a properties valuation date of July 1, 2009 and so on.

2010 Assessment Roll

• Released – January 2010.
• July 1, 2009 Property Valuation date.
• Based on sales in your area between January 1, 2009 to October 31, 2009.

2009 Assessment Roll

• Released – January 2009.
• July 1, 2008 Property Valuation date. (94% used July 1, 2007 – Bill 45)
• Based on sales in your area between January 1, 2008 to October 31, 2008.

2008 Assessment Roll

• Released – January 2008.
• July 1, 2007 Property Valuation date.
• Based on sales in your area between January 1, 2007 to October 31, 2007.

One of the most interesting facts about the 2010 Assessment Roll is that in most cases, it represents two years of real estate market movement in BC.

Normally, every year the BC Assessment Roll is based on a market value approach to assessment with a one-year term of duration. However, there was a slight wrinkle in the 2009 Assessment Roll. In late 2008, BC was suddenly faced with the “Global Financial Crisis of 2008”. Both stock markets and governments around the world reacted to this negative event.

The BC Provincial Government reacted by passing the Economic and Stabilization Statutes Amendment Act, 2008, S.B.C. 2008, c.44 (Bill 45) on November 27, 2008. The act basically stipulated that for the 2009 Assessment Roll – BC Assessment would have to use a July 1, 2007 or July 1, 2008 valuation date, whichever is lower.

As a result, for the 2009 Assessment Roll – BC Assessment used a July 1, 2007 valuation date for approximately 94% of property owners in British Columbia instead of the normal July 1, 2008 valuation date. Therefore, these owners saw an identical or lower assessed value on their 2009 notices compared to their 2008 notices.

Bill 45 basically “froze” 94% of BC property owners assessment values at a July 1, 2007 valuation date level.

Therefore the 2010 Assessment Roll with a July 1, 2009 valuation date represents two years of real estate market movement in BC from the last true valuation date of July 1, 2007 used by BC Assessment on most properties.

I wanted to get a better perspective on the 2010 Assessment Roll by breaking out the figures that normally would have been attributed to a “True” 2009 Assessment Roll with a “Normal” July 1, 2008 valuation date.

Unfortunately, when speaking to John Barry, Manager of Communications of BC Assessment on January 14, 2010 I was told that as a result of Bill 45, BC Assessment did not create a “Normal” 2009 Assessment Roll with a “Normal” July 1, 2008 valuation date. They only created a “Revised” 2009 Assessment Roll, which in 94% of BC property owners’ cases used a July 1, 2007 valuation date.

In the past, appraisers, realtors, banks, mortgage companies and individuals have all used BC Assessment notices as a basis of comparison in determining a properties potential and current market value. As Bill 45 does not apply to the 2010 Assessment Roll, the 2010 figures will be far more useful and pertinent then those from the previous year.

Late 2009 saw some major positive residential market movements in British Columbia. In some BC real estate markets, sales and prices dramatically increased in the last half of 2009.

So, do the British Columbia 2010 Assessment Roll figures accurately represent the current market value of residential properties in BC as of January 15, 2010? No, a lot has happened in the BC real estate market since July 1, 2009 and most of it is positive.