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How Does Your Property Tax Assessment Relate to Your Property Taxes?

January 4, 2022 | Posted by: Julie Stewart-Boyle

BC Assessment has just published assessed values of properties in BC.   You can now access your property assessment online here.

Prices have increased substantially according to the B.C. Real Estate Association’s December 2021 Housing Market Update. Vancouver homes jumped 16% on average, while in Chilliwack they increased 36.5%. Residential properties on Vancouver Island rose 31.5% from Nov. 2020 to Nov. 2021.

Each January, BC Assessment mails property assessment notices to the owners of 2+ million properties in the province. The notice contains your assessed value (which is the estimated market value of your property as of July 1st of the previous year), the property classification, and tax exemption

Each year, new tax rates must be set before May 15th in order to raise enough revenue from property taxes to cover a municipality’s annual budget. Property tax rates are independently determined by your taxing authority and are applied to each $1,000 of taxable assessed value. BC Assessment functions independently of taxing authorities and has no role in setting property tax rates

Formula for the property owner, to calculate property taxes:

Example:  Say your property is assessed at $500,000 as of July 1st of the previous year. Since the property tax rate applies to each $1,000 of taxable assessed value, you must divide the assessed value of your property by $1,000. Next, multiply that number by the property tax rate for your property class to determine your property taxes.

 

 


And if you really want to nerd out and find out how the municipality calculates the property tax rate (or Mil Rate), read on:

Mil Rate Calculation:

Every year, municipalities approve the amount of revenue required to operate. From this amount they subtract the known revenues, such as grants, licenses or permits. The remainder represents the amount of money needed to be raised by property taxes.

The word “mil” is derived from the Latin word for one thousand (1,000). In tax terms, one mil is equal to 1/1000 of a dollar or one dollar ($1.00) in tax for every one thousand dollars ($1,000) of assessment.

A sample calculation:

A City needs $22,000 to balance its budget. The total taxable assessment for all properties is $5,939,467.

The Mil Rate calculation expressed as an equation is as follows:

$22,000 (amount to be raised)
$5,939,467 (total taxable assessment)     X     1,000   =   3.70   =   Mil Rate 

On Home Price Increases:

A new survey from Angus Reid shows a nearly even split amongst those who want to see home price increases continue, and those who would prefer to see prices retreat.

“High housing prices have divided Canadians into three groups: the haves (40%), who want the boom to continue lifting their assets, the have-nots (39%), who hope for the market to tank so they can get in, and the status quo (21%) who don’t mind prices staying right where they are,” the Angus Reid report reads.

 

If you would like to discuss any of the above information or how you would qualify for a mortgage, please contact Julie Stewart-Boyle, 250-668-4420   julie@jsbmortgages.com.   Your mortgage consultant, mortgage broker, mortgage professional, mortgage expert, yes, you get the idea!

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