It’s that time again. Assessments have arrived.

COLUMN: Assessment hike does not equal tax increase

Your assessment only important in relation to your neighbour’s and how much your town wants to spend

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

Verdict gives murder victims’ parents sense of closure

A guilty verdict delivered earlier this week was “like a weight lifted off the chest.”

U.S. college bribery scandal shines light on serious problem in Canada

Looking at the bigger picture of marginalization in universities

Mommy’s Inside Voice: The self-love struggle

Hats off to us babes. We are alive, and kickin’, despite everything that has fought for the opposite

Victoria doctor forced into early retirement as specialist moves into rental space

General practitioner says he can’t afford rising rents, even amidst doctor shortage

Five highlights in the 2019 federal budget

Latest budget includes a sprinkling of money for voters across a wide spectrum

Vancouver Island cougar might have been shot with bow-and-arrow

Conservation officer service looking for animal near Port Alice

BC Ferries looks for more feedback on 25-year plan for Swartz Bay

Some suggestions already under consideration include a cycling route, waterfront park

Dutch police question new suspect in deadly tram shooting

Police are looking for additional suspects in the shooting

Case against former Nanaimo CAO Tracy Samra expected to be dropped

B.C. Prosecution Service tells those involved with case that they won’t be required in court

Theatre production reimagines the music of Joni Mitchell

Arts Club theatre company presents ‘Circle Game’ at Nanaimo, Duncan and Courtenay

Starbucks to test recyclable cups, redesign stores in B.C., U.S. cities

The company also said it plans to redesign its stores as it adapts to increasing mobile pick-up and delivery orders

In pre-election budget, Liberals boost infrastructure cash to cities, broadband

The budget document says the Liberals have approved more than 33,000 projects, worth about $19.9 billion in federal financing

‘That’s a load of crap’: Dog poop conspiracy spreads in White Rock

Allegation picked up steam through a Facebook page run by a city councillor

Most Read