By now most everybody is aware that us Richmondites got nailed when it came to property assessments. Values were up 17-22% over last year. Awesome, yes, if you plan to cash out and move to the Valley. Not so awesome when tax notices come rolling in on July 1.
The Globe and Mail posted the article below last weekend. Interesting insight, but I particularly loved their lesson #1. Thanks for the tip.
The appeal of property assessment
In a region usually fuelled by real-estate hype, one group of homeowners are refreshingly blunt about how terrible their properties are.
The house is on a flood plain, they point out. It hasn’t been renovated for 40 years. It’s in the worst part of Whistler/West Vancouver/Coquitlam/Victoria. The property is sloped and strangely shaped, difficult or impossible to build on. It used to have a view of the mountains/ocean/city but now it doesn’t.
These anti-real-estate agents are the rarefied group – 1 per cent of B.C. property owners – who appeal their assessments every year to get them reduced. Assessment notices have just gone out, prompting gloating in some households but panic attacks in others. With the Jan. 31 deadline for appeals approaching, this year’s small cohort are preparing to do battle – some for the first time, some as part of an annual ritual.
It’s no easy thing to take on the Biggest Brother of them all in government: the B.C. Assessment Authority, those usually faceless people who decide each year how much every house, farm, tower, warehouse and chunk of empty dirt in the province is worth. But if you do, here are four lessons to help you navigate the system – or at least save you from a pointless crusade.
Lesson 1: Don’t live in Richmond (or South Granville or Cloverdale)
BCAA’s decisions about property values set the stage each year for a cascade of calculations to determine how much each owner will pay in city taxes, school taxes, hospital taxes, transit taxes – and a small tax to keep the assessment office itself running.
That means a yearly shift in the tax landscape among city neighbourhoods, within regions, and even between different parts of the province.
Like a wind that blows across the desert sand, the assessment office’s decisions – based mostly on the previous year’s sale prices of property in the area, but also on building permits that indicate renovations, the occasional personal inspection, aerial pictures and, recently, Google-style street view snapshots – create new dunes every year where assessments go up in one place, down in another. That shifts a bigger part of the tax load to those built-up bumps. The people whose assessment goes up more than the average in their city or region pay more.
An increase in assessment doesn’t automatically mean an equivalent percentage increase in taxes.
But when an assessment on a house goes up more than the city average, the owner will end up with a bigger tax increase than what city councillors say they have set. And an assessment that goes up more than the regional average will mean the owner ends up paying more school taxes and regional taxes. Residents of Metro Vancouver will also have more TransLink taxes shifting to the high-assessed dunes.
That means many homeowners in Richmond, where residential property assessments have increased by 17 per cent, the highest in the region, will feel the pain as they pay a bigger share than last year’s 10.3 per cent of TransLink’s $297-million budget.
Lesson 2: Bring ’em into your backyard
Alan Sturgess knew his assessment would be going up when the house next door was torn down and replaced with a mansion that sold for $3.6-million. But he didn’t expect it to go up by $300,000 in 2010, to almost $1.8-million. So he appealed.
When the assessors came to his house, Mr. Sturgess made them walk up and down the block around his 29th Avenue property, high on Vancouver’s Mackenzie Heights, before he let them in the house.
He told them especially to check on the spectacular, 180-degree views his neighbours had of the city and Coast mountain range.
Although his circle of advisers (real-estate agents, friends who had previously won appeals) warned him never to let those government varmints into his house, he invited them in to see how backyard trees have obscured his north-facing windows.
The assessors asked why he didn’t cut the trees down. Mr. Sturgess, who bought the house in 1973, explained patiently that he used to but a city bylaw passed in the 1990s prohibits it.
“So they said, ‘We can see you’ve lost the views. We realize you’ve got a good reason.’”
They called him three days later to make an offer: $100,000 off the assessment.
His victory last year was short-lived. His assessment this year is back up again, to $1,982,300 this time. He’s planning to appeal again.
Lesson 3: Know your neighbourhood
A few blocks away from Alan Sturgess, Al Dreher and Marlene LeGates went all the way to the third appeal level (beyond the phone call to the office, beyond the tribunal’s rejection of their request for a reassessment).
Their potential tax bill means a lot to them. Both are retired and have already been deferring taxes for the past three years to save money.
“Just making ends meet is hard enough,” said Mr. Dreher, who was trying to get his assessment reduced to $1-million from $1.375-million.
He tried arguing that his house on Puget Drive was overvalued because it’s on a pie-shaped and sloping lot. He presented evidence that there used to be a 15-per-cent difference between his house and others in the neighbourhood because of that, but the 2010 assessment reduced that discount.
He told them that builders have said it would cost 30 per cent more to build on this difficult site, which would likely reduce its future sale price.
Finally, Mr. Dreher had gone through dozens of records for houses in his neighbourhood and found that the value on more than 50 per cent of them had been lowered for 2010, while his assessment had been increased by 17 per cent.
But the panel chair decided that the 2007 sale prices of two houses nearby were better evidence than anything Mr. Dreher came up with.
The experience has left Mr. Dreher and his wife disenchanted with the assessment-appeal process.
“I find they reject everything. They just don’t listen to anyone,” said a disgusted Mr. Dreher, who was a construction supervisor before retiring.
Lesson 4: Don’t count on a higher authority
Of the 12 appeals by homeowners that went to the highest level, the Property Assessment Appeal Board in the Vancouver Sea to Sky Region, only two succeeded.
At the level below that, the Property Assessment Review Panel, 15 people succeeded in getting reduced assessments out of 32 cases.
What seems to work: Making a good case at the lower level. Coming armed with photos, assessments in the area and comparable sales prices. Providing evidence of significant differences between your property and those that have sold recently for more in the neighbourhood. “Market evidence” is the trump card.
What doesn’t seem to work: Pointing out that the assessment of your Commercial Drive property is higher than what you just paid for the house. Complaining that your assessment on your West Van street has gone up while that of your neighbours has gone down. Telling the assessor you don’t have a view because the municipality of Whistler has a bylaw prohibiting tree cutting when, as it turns out when the assessor checks into it, that’s not true.
What doesn’t seem to matter: Telling the board that the assessment authority’s staff are useless and incompetent. That opinion pops up in decisions and conversations with embittered property owners, but the vitriol doesn’t seem to affect the decision.