It’s that time again. Assessments have arrived.

Assessment hike does not equal tax increase

Every January, when BC Assessment Authority sends out its annual assessments, many panic as they see double-digit increases, and as sure as rain (or sometimes snow) in January, they assume this is how much their taxes are going up.

My first year as a reporter I had to look into this. It was all pretty straightforward, even though I had never owned property: the assessment value is based on how your property stands in light of the real estate market, plus your improvements to the property. If your assessment goes up a lot, chances are many other people’s assessments are too. Somehow though, many still jump to the conclusion the assessment automatically equals the level of a tax increase. Not so. Earlier this week, I watched a valiant soul – let’s call him Mike H. – try to explain this to someone on an online discussion forum, only to be told he was living in fantasyland. The thing is he’s not. He’s dead on.

The assessment, first off, is not a real estate appraisal. People can and do challenge an assessment, but first they need to understand it. Its function is to give local governments a yardstick on how to divide the tax burden. It is but one part of an equation, the other being the mill rate and the end product being the actual tax requisition. If my property increases more than the average – say by 17 per cent versus a 15 per cent average – I will probably see a tax increase, assuming the local government wants more revenue – and it probably does. However, if the value increases less than the average, I might see a smaller increase than most or even a drop. Again, it depends on local government demand, but that’s a different topic.

On the online forum, when someone pointed out this city’s scheduled tax increases are actually in the 2-3.5 per cent range, another person chimed in saying this would be on top of the assessment increase.

Sigh…. Again, clearly the respondent didn’t get the assessment is not a tax increase but is simply used to figure out tax rates.

In the first small town I worked in, property values were stagnant, even dropping. Did this mean a drop in city coffers? No. Dropping assessments don’t mean less revenue; they simply mean a government has to adjust its rate to generate what it needs.

They do when things rise too. All of this sounds as a sexy as a high school math exercise. For example, let’s say the number 100 represents what a government needs and 20 represents the total assessment roll (you’ve just received your tiny portion of this in the mail), the rate then needs to be five. Please note these are totally fictitious numbers; I’m trying to keep this straightforward. If the following year, the assessment figure goes up to 25, the rate can be drop to four unless the government needs to increase the end product, i.e. 100, to pay for everything – and it probably will, if for no other reason than inflation, though possibly other reasons too.

Yes, property values in many parts of this province have been going wild for years, and no one likes tax increases, especially when they’re steep, but we can spare ourselves a little stress by understanding what these numbers mean, as confusing as they may seem.

Just Posted

Faulty transmission line in Campbell River caused loud noise, flickering lights, says BC Hydro

Natural gas power plant went offline following BC Hydro equipment failure

Divers bring up more tires, crab traps and old bottles from the water

For the first five years of its annual clean-up of the waters… Continue reading

May thinks time is right for Greens to make gains

Green Party leader in Campbell River for event with local candidate Mark de Bruijn

Strathcona Regional District looking at pay hikes for board members

The Strathcona Regional District board is planning on a pay raise. At… Continue reading

City still fighting for long-term plan for Snowden

Another letter from the province without ‘tangible response’ spurs mayor to request in-person meeting

VIDEO: The ‘most cosmopolitan’ of butterflies could migrate to B.C.

The painted lady butterfly will likely arrive this summer from Southern California

Inspirational Vancouver Island youngster dies after battle with brain cancer

Kaiden Finley ‘was seriously the strongest 11-year-old’

Is it a homicide? B.C. woman dies in hospital, seven months after being shot

Stepfather think Chilliwack case should now be a homicide, but IHIT has not confirmed anything

Indecent caller handed 18-month conditional sentence

Vancouver Island man pleaded guilty to making indecent phone and video calls to women across B.C.

Sources say Trudeau rejected Wilson-Raybould’s conservative pick for high court

Wilson-Raybould said Monday “there was no conflict between the PM and myself”

First Nations public art piece stolen in Nanaimo

Spindle Whorl went missing over the weekend, according to Nanaimo RCMP

Father-son duo at B.C. Children’s Hospital helps new dads fight depression

The pair teamed up to introduce the only known research-based mindfulness workshop for new dads

Mexican restaurant in B.C. told to take down Mexican flag

General manager of Primo’s Mexican Grill in White Rock: ‘I’ve never heard of anything like this’

B.C. NDP moves to provide tax credits, tax cut for LNG Canada

Provincial sales tax break of $596 million repayable after construction

Most Read