Tax hikes likely for some as house values soar

Assessment early warnings jump by 55 per cent

BC Assessment is sending a “significantly higher” number of early notification letters informing homeowners to expect a 2016 assessment that is at least 15 per cent above the average increase in their neighbourhood.

Last year, BC Assessment sent between 20,000 and 24,000 of these letters. This year, it is sending out about 37,000, an increase of more than 55 per cent.

More than 65 per cent of the letters will be received by owners of single-family homes within 20 to 30 minutes of Vancouver, including the North Shore, Burnaby, Tri-Cities, New Westminster, Richmond and Surrey.

“Taxes for the folks getting the letters are likely to go up,” said Jason Grant, a regional assessor at BC Assessment.

“We send out these letters every year and we are sending out more this year to start the conversation early (about significant increases in home value). If people have any questions about how we put together the information, they can contact us.”

All of this comes as expected averages for 2016 assessments are rising more quickly and higher than they have in recent years.

It’s the most significant single-family home market in many years. I’d have to go back to the early 1980s and in the mid-2000s.

JASON GRANT REGIONAL ASSESSOR, BC ASSESSMENT

It’s been a while since assessments last moved by as much as 15 to 25 per cent, said Grant, who has been in the position for 11 years and has worked for BC Assessment for almost 25 years. He can remember only two or three times when assessments have risen by this much in a year.

“It’s the most significant single-family home market in many years. I’d have to go back to the early 1980s and in the mid2000s.”

The largest number of letters, more than 8,600, are being sent to homeowners in Vancouver, followed by 7,180 in Burnaby, 1,891 in Richmond and 1,386 in Surrey.

“There are more outliers this year,” Grant said. “There are more pockets in (these) neighbourhoods that are moving more than the expected averages.”

Exactly what is driving these mini-spikes is hard to pin down without knowing exactly which homeowners on which streets and corners will receive the letters. There are dozens of variables that affect sale prices.

Cameron Muir, chief economist at the B.C. Real Estate Association, said the higher number of letters being sent to property owners in Burnaby reflects “upward pressure (on the single-detached market there) because of its relative value, compared to some other markets, and as a result, you saw a little stronger increase, likely, in that marketplace.”

The finalized assessments, which will be released on Jan. 4, 2016, will reflect values as of July 2015.

Many single-family home markets have moved upward quickly in the months since then, Grant said.

For example, a look at 17 comparable west side Vancouver homes — all about 4,000 square feet and on 120-by-33foot lots, located within an area of six blocks between West 18th Avenue and West 24th Avenue — shows an increase in sale prices of 36 per cent between January and November 2015, to about $2.6 million from about $2 million.

Looking at a set of specific examples of typical houses, BC Assessment found the highest percentage change in assessed value for a single-family home on a lot in East Vancouver. Built in 1983, the property rose 28 per cent in assessed value, to $1.267 million in July 2015 from $993,000 in July 2014.

The most modest increase on BC Assessment’s list of typical homes within 20 to 30 minutes of Vancouver was found for a single-family home in South Surrey. Built in 1981, it rose 10 per cent to $789,000 from $716,000.

By comparison, values in the rest of the province are “less dramatic,” in the zero to 10 per cent range.

Typical strata residential increases saw rises in the five to 10 per cent range.