Commercial property assessment appeal process outlined at session
A veteran property assessor says the Saskatchewan property assessment system has become so complex that it creates inequities in value.
“The assessors will tell you it has become a system of winners and losers,” Archie
Fieldgate of the Altus Group consultants told about 25 local business people.
“There should be no losers. It should become fair and equitable,” said Fieldgate, who has more than 50 years of experience in assessment.
His associate Ryan Simpson said part of the last reassessment process is a heavier emphasis on statistical testing using something called multiple regression analysis.
“They use backwards regression analysis in determining sales on commercial properties.”
The analysis involves “a combination of variables thrown into a mix and using statistical thresholds determining where and if breaks are warranted for age, location, property type, etcetera.”
The Saskatchewan Assessment Management Agency (SAMA) developed a comprehensive rental analysis with a focus on Yorkton, Moose Jaw, Weyburn and Estevan with adjustments made for average rent differences and other variables. One formula determines value by a multiplier of the base rate times square feet of the property.
“We’ve seen a need for more information and better facts and better explanation at how they arrived at your assessment,” said Simpson, urging owners to comply with SAMA requests for data.
Failure to comply loses the owner the right to appeal assessment and can result in fines of $5,000 or $10,000. Fieldgate said SAMA is very protective of data and is appealing a court ruling that it must disclose data for appeals. One property owner said the market cap rate around six per cent determining commercial property value is “ridiculously high.”
Simpson said an eight per cent rate for Moose Jaw is more realistic.
Value of a property generating $20,000 net income at a six per cent cap rate is $330,400. That value at an eight per cent cap rate is $250,000 — a 32 per cent difference.
Fieldgate said SAMA has become more aggressive in appealing board of revision and municipal board decisions because the municipalities ask for appeals to keep the tax base up.
The Altus Group filed over 2,300 property assessment appeals in Saskatchewan last year. Many are still under appeal or in the courts.
The group has various options for payment, fee per hours, a fee of 50 per cent on first year tax savings, or a combination.
Rod Van Slyck, who organized the information session in Moose Jaw, said owners don’t mind paying property taxes if they are fair.
Property taxes have become the “number one line expense” in recent years.