Property tax assessments can feel a bit like being on a dating app, with strangers appraising value before even seeing the merchandise. And if you’ve just bought your first home, the experience can be especially jarring, since the assessed amount may not reflect what you paid.
Rest assured, this isn’t something to take personally. A property tax assessment isn’t so much about your home but rather the company it keeps.
How assessments are determined
The city looks at similar properties in your neighbourhood as a collective, so the assessed amount might not reflect any upgrades you’ve done, or even the condition of your home. They also include sales data from the previous year, which doesn’t necessarily account for recent fluctuations in the market.
It’s important to remember that the city needs enough money from property taxes to meet its annual budget. That’s why even in years when values are down, your property taxes can stay the same – or even go up.
Assessed value vs. market value
Market value is the price your home is likely to command in the current real estate market and accounts for such factors as curb appeal, upgrades, and supply and demand. Assessed value, as described earlier, is used to determine how much you’ll pay in annual property taxes. To see how your assessment compares to others in your area, simply search your address here.
Which matters more
Market value is king, as it more accurately reflects your home’s current worth; in this case, the higher is usually the better. With assessed value, however, a lofty number from the city means paying more property taxes. So if you think yours is too high, you can file a dispute here
Ultimately, the only number that matters in a sale is what a buyer is willing to pay, and what you’re willing to accept. Thinking of selling and want a more accurate snapshot of your home’s current value?