Property tax assessments to be frozen

Gordon Campbell has pledged to freeze BC property tax assessments at their 2007 level to ‘help people cope with turbulence in property values’.  I’m trying to figure out the motivation for this move, perhaps to people that don’t understand property tax it seems like a relief?  Our property tax system is not set up like California, where property tax is dependent on the assessed value.  The crashing California real estate market has meant less money flowing into government coffers, leaving cities scrambling to make their budgets work.

In Vancouver your property tax assessment only matters in its relation to your neighbors.  Every house price in Vancouver could drop across the board by 50% and the property tax paid by each owner would remain the same.  This protects city tax income, but can be tougher on tax payers.

Tax assessments in Vancouver are done in July, which coincidentally was very close to our market peak.  Freezing assessments at their 2007 value may help to make it appear house prices haven’t fallen as far as they have if the 2008 assessments are never made public.  I don’t believe this is a motivating factor though, since the REBGV benchmark price and average sales price data still paints a more complete picture.

45 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
NO -LYMPICS
NO -LYMPICS
11 years ago

I have been through the assessment appeal process on several occasions.

The Appeal board is a bunch of appointees that by and large will not contradict the BC Assessment assessors opinions, so the onus is on you to submit a good case.

Yes,I have won in the past , but it takes a lot of time and effort.

However, if you Local Gov't has a GIS system , it makes the research for your assessment appeal case a lot easier.

scoop
scoop
11 years ago

I expect there will be a right to appeal, but the basis of the appeal will be that the market value of your property on July 1 2007 was materially different than assessed. If that was the case, then you would have already appealed the decision earlier this year, no?

NO -LYMPICS
NO -LYMPICS
11 years ago

Why it can be a good idea to appeal(and why I hope that we still can regardless of Campbell's assessment freeze). When you Local Gov't has a data base of all final assessments ( ie all appeals are exhausted and any/all final adjustments made ), it will decide on a Mill Rate. However, what I also found out is that a Local Gov't will also look at a demarcation point re % increases/decreases of property assessments. Certain areas and certain types of properties may have enjoyed gains in assessed value while others may have experience drops or lesser gains in assessed value (ie it is not always an across -the -board type of equality. If your property experiences a certain benchmark drop in assessed value, say X %, this may be taken into account in your property taxes. If your… Read more »

rx
rx
11 years ago

I think the goal is the head off complaints – I don't think they can remove the legal right to appeal, and with prices falling below 2007 levels you will see some appeals, but not nearly as much as if they'd assessed at peak 2008 prices.

Would love some clarification from the Gov on this though.

NO -LYMPICS
NO -LYMPICS
11 years ago

Campbell's announcements re:" assessments freezes" were well- choreographed, ( given assessments will be out next month), but he has created about a 2 month heads- up to all concerned . However,dissecting this matter in a "legal" sense, does the assessment freeze deny you a right to appeal, given normally you have till about Jan. 31 (approx. 30 days from the time you get your assessment)to file an appeal. If Campbell has frozen the upcoming assessment to 2007 levels, then "de facto" , does this imply there is no grounds for appeal,as you have "technically" missed the 2007 deadline , hence the 2007 assessment is now a given, or why else is it frozen ? Campbell should be more up front as to WTF his REAL intent is, versus leaving it so gray and hanging . Are we still allowed to… Read more »

Gaetan Royer
11 years ago

Property taxes normally vary with market value. Right now, condo prices are falling much faster than the value of high end homes.

The freeze means this: condo owners (whose properties have dropped in value and should pay less taxes) will subsidize high end home owners (whose properties have either retained or increased their value, thus without the freeze, they would pay higher taxes).

Capmbell's decision favours posh residential areas at the detriment of low end condos and townhouses whose value is dropping like a stone. This freeze makes a regressive tax even more regressive.

Last year, barely a week after the property assessments came out, Campbell announced that the Home Owner grant threshold would be raised from $750,000 to $950,000. The wealthy never skip a beat when it comes to protecting themselves and shifting taxes to the masses.

timeforcities.ca

scoop
scoop
11 years ago

In terms of official rationale, I think that anonymous #21 is on the right track.

“We know that property values have fluctuated widely since assessments were conducted last July,” said Premier Campbell. “To avoid confusion, anxiety and unnecessary assessment appeals prompted by higher-assessed property values that do not reflect current market conditions, we will lock-in B.C.’s assessment rolls at 2007 assessed levels.”

It's largely a symbolic move, but at a practical level they are avoiding a January storm of angry ho-moaners thinking they are being over-taxed because their assessed value is 200K more than their neighbour just sold his similar house for (after 9 months on the market and multiple price drops).

NO -LYMPICS
NO -LYMPICS
11 years ago

Squidly 77

Re "Housingpanic blog"

That is an awesome link:

Thanks !

I love the post by the guy named " Anonymous" (posted NOV. 3 ) and his Florida Real Estate experiences.

He stated that a lot he bought for $1,500 ended up with an asking price of $60,000 in a few short years . A frenzy then a collapse.

Lots of other good comments.

Recommended read for anyone that hasn't.

islander
islander
11 years ago

"no subject to sale of offers please” is the butchered-syntax way of writing:

We will not consider offers that include the condition that you sell your own house first.

patriotz
patriotz
11 years ago

……Or are you implying the Seller takes the hit which is inclusive from the Purchaser’s offer ?

Correct. If the buyer is willing and able to pay X dollars for a house, he will pay X dollars inclusive of PTT. The seller will get X – PTT. If there were no PTT, the seller would get X.

If you really want a blunt example, imagine that PTT was increased to 100%. Would people be paying 100% more inclusive of PTT? Of course not, because they are already paying all they can. Sellers would have to drop prices 50%.

This differs BTW from sales taxes on consumables the burden of which is split between buyer and seller, because asset pricing is completely different from consumable pricing.

squidly77
squidly77
11 years ago

caution this an HP link http://housingpanic.blogspot.com/2008/11/anon-pos… i dont normally paste articles..but this one seems fitting its a response to the above post Paul E. Math said… "Realtors, you represented yourselves as trustworthy experts in real estate. You were not. If you were an expert in real estate you would have known that prices were out of line with rents and incomes, that we were in a bubble, and you would have warned clients against buying property. You called yourselves 'agents' which is a technical term that entails that you must put the clients interests above your own. You did not. You talked people into buying homes that they could not afford, that were destined to drop in value so that you could obtain a commission cheque. You preyed upon the ignorance and vulnerability of your clients. You told them they… Read more »

NO -LYMPICS
NO -LYMPICS
11 years ago

Patriotz;

Re Post # 30

Please link to where the seller pays the PTT ?

……Or are you implying the Seller takes the hit which is inclusive from the Purchaser's offer ?

The tax is 1 % of the first $200,000 and 2 % of the remaining amount. Unless one qualifes for the PTT exemptions, it is still a substantial amount.

On $ 500,000

1 % of $ 200,000 is $ 2000

2 % of $ 300,000 is $ 6000

PTT is $ 8000

That $ 8000 tax on top of $500,000 means $ 8000 less for the offer bid or other things.

rx
rx
11 years ago

We're all poor now Ted, when your house is shedding thousands of dollars in value every week and your RRSPs have dropped by 40% every little bit counts.

😀

ted
ted
11 years ago

Thanks for pointing that out anon, but would the home owner grant mean much to someone in a 1 mil plus house?

anonymous
anonymous
11 years ago

If there is a disparity between the rise in real estate prices and the rise of the Home Owner Grant cap, some people may be winners or losers. Check out:

http://vancouver.ca/corpsvcs/treasury/faq.htm

In 2008 if your house is assessed over 1,050,000, you starting loosing your Home Owner Grant ($845). I don't know how they come up with that 1.05M number (It rose by 10.5% in 07/08 and 21.7% in 06/07) . If they aren't tied to last years assessments and that number rises, it's a discount for those "rich side of median".

It's also worth pointing out that real estate doesn't rise (or fall) uniformly. For those people in the spectrum building (I'm sure their assessed value has come down more than most), this will be another stick in the eye.

patriotz
patriotz
11 years ago

Of all the gouging taxes, this “PTT ” one puts affordability of housing that much further out of reach.

Wrong. As we have said before, RE sells for the highest price a buyer is willing and able to pay. If I am willing and able to pay, say, 500K, I will pay that amount whether or not it includes PTT. The cost of PTT is borne by the seller.

My best guess is that we won’t really see the drop in house prices we are all expecting until people start losing their jobs.

House prices are already dropping faster than we had expected.

“no subject to sale of offers please”

What does this mean?

Seller wants the money RFN.

sluggo
sluggo
11 years ago

How about those October stats?

Down 4.2% in one month….and we're just getting warmed up!

SurreyJoe
SurreyJoe
11 years ago

Regarding Vancouver Sun article the best part of the article is Somerville's comment that inventory of active listings was down 3% from September. "That, Somerville added, combined with lower levels of new building taking place this year, 'are part of an overall supply response that will be necessary for the market to stabilize.'"

Of course what he's ignoring is that listings are 77% higher than last year and while housing starts may have recently declined they were very strong in the first 8 months of the year.

squidly77
squidly77
11 years ago
squidly77
squidly77
11 years ago

look at the massacre hes leveled at alberta today..

holdem
holdem
11 years ago

My opinion of Gordo's "Assessment Freeze"? – he and/or someone in his cabinet has no idea about the relationship between property taxes and assessment values as laid out by Pope. Would it really be surprising?

I think he was trying to get a tax freeze on property taxes for pre-election brownie points but going about it the wrong way.

squidly77
squidly77
11 years ago

i have a request..can someone here make up a graph for days on market regarding the vancouver housing scene

if its sent to this blog and others its bound to get posted

if sent to garths site he will usually post it at the top..

should help

greaterfool.ca

Keeping an Eye on th
11 years ago

PS had not the same pimps forecast the benchmark to hit $1000000.00 by 2010?

Keeping an Eye on th
11 years ago

"Metro Vancouver home equity takes a huge hit

Benchmark price of detached house drops 9.9 per cent since last May"

Re-diculous SaysHere we go

Vancouver Sun: Home Equity takes a huge hit.
http://www.canada.com/vancouve…..2965a60a74

As per RE-diculous's Link:

Note the article quotes several pimps, which should reported to Maggie.

I appears from the article the pimps were not wearing their happy smiles.

Maggie will have to spank them.

anonymous
anonymous
11 years ago

I wish the Premier would just give us his rational. I have a couple theories. Here's one: I suspect the assessment of 2008 values would be much more controversial than usual as it is so near inflection point in market prices. Near July 1, 2008 there were relatively few units selling. I imagine most sales were near peak price. However, there were likely a few sellers who rushed for the exits (like me) and sold investment properties at a heavy discount. The majority of owners aren't trying to sell. Many will notice the few lower priced sales. There could be a lot of reassessment requests and misdirected anger. I tend to agree that relative valuations won't be as easy to determine from 2008 sales as 2007 sales. In the case of Vancouver, the values are averaged over 3 years anyway… Read more »