BC assessment notices have arrived in the mail, and as a property owner, you may be wondering what the difference between assessed value and market value in BC is. Understanding the difference between assessed value and real estate market value is important for both home sellers and home buyers. In this blog, we'll clarify what BC assessment is and how it's calculated, and dive deep into the difference between assessed value and real estate market value.
Assessed value is the value determined by the government for the purpose of determining how much municipal or provincial tax any given homeowner will pay for their ownership. Market value, on the other hand, is defined as what a buyer is willing to pay to purchase a home and what the seller is willing to agreeably sell it for.
Assessed Value Calculation
The main purpose of BC property assessment is to determine how much tax a homeowner will pay. The assessed value is usually calculated online and is based on the property's location, view, size, lot size, age, and other real estate market information based on July 1st of the previous year. However, it's important to note that the appraisers rarely visit a home to assess it in person, which means that the assessed value may not take into account any additional renovations, layout, maintenance, etc.
Market Value Calculation
Market value is determined by a variety of factors, including the interior layout and design, location and proximity to various types of transit, age, interior size, upgrades and maintenance, and the current real estate market trends. Unlike assessed value, market value takes into account the buyer's physical presence to view the home and their emotions and needs.
Differences between Assessed Value vs Market Value
The main differences between assessed value and market value are:
Assessed value is calculated by the government, while market value is determined by what a buyer is willing to pay.
More factors are taken into consideration when determining market value, making it a more accurate representation of the value of a home.
Assessed value is only assessed once a year on July 1st of the previous year, while market value can change frequently based on the current real estate market trends.:
Physical Property Inspection: B.C. assessment values are determined without a physical property inspection, whereas market value takes into account the experience of the property itself, which can significantly impact its value.
Broader Considerations: Market value takes into account a wider range of factors compared to the narrow frame of reference used for B.C. assessment values.
Real-Time Valuation: Market value is a real-time evaluation, while B.C. assessment values may not reflect current market conditions or changes that may have occurred in recent months. Stay up-to-date with a comprehensive market value analysis.
In conclusion, understanding the difference between assessed value and market value is important for both home sellers and home buyers. Assessed value is determined by the government for tax purposes, while market value is determined by what a buyer is willing to pay for a home. Market value takes into account a variety of factors, including the current real estate market trends, and is therefore considered a more accurate representation of a home's value.
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