Property assessments are too high!

Like many others, the property assessment on my modest home went up again and therefore my taxes also went up again. And like others, I sent in my Notice of Reference to the assessment office – this is the first stage in the appeal process. And I had a visit from an assessor.

Apparently the assessors are quite busy at this time of year. The assessor who visited my property was a pleasant man who is just doing his job. We went through my house and around the outside and he took notes of everything.

I’m anticipating that I’ll hear back in a few weeks that they will not lower my assessment. But at least I made the province spend more money on sending an assessor to my place – if they want my money they’ll have to earn it.

A couple of points I want to mention about the assessment process...

First, apparently they don’t compare houses to each other. In other words, the assessor did not want to hear about the huge house down the street whose assessment is only about $30-40 thousand more than mine, even though it is double the size and brand new. This is one reason assessments are so out of wack. I think you have to appeal every year or else it keeps going up and up.

Second, what they do is to look at my property and then compare it to similar properties that have recently been sold to determine how much mine is worth – market value. Essentially I’m being penalized because other people are crazy enough to overpay for a small house like mine. I’m still not sure how that is my fault. I bought a house at a reasonable price several years ago because that was the price of property I could afford (including the yearly taxes). Now it has gone up by 50% in assessment, but it is still the same house (we did not do any improvements other than paint and necessary minor repairs). At some point I won’t be able to afford to live in this house due to the ever rising assessments – does that make sense?

As I was chatting with the assessor he suggested some potential changes to the system that he heard from others, but none addressed my concerns. One was that the assessment could be frozen or capped, and when the house is eventually sold anything above the assessed value would go to the municipality – Not a good idea!

So I suggested an adjustment to the assessment process that just might work … and here it is:

When a property is sold, the selling price becomes the new assessment. This makes sense since assessments are based on market value and the only time you know the market value of a property is when it is sold. So if I buy a house for $100000, then the assessment should also be $100000. Next the assessed value should be frozen at that amount for a few years (3 to 5) to give the new owners a little certainty. After that the assessment should go up by the rate of inflation each year, which is usually somewhere around 2%. This would be fair and give homeowners a fighting chance. And property owners can plan their budgets for the future since they’ll know what the assessed value of the property is. It can be quite a surprise when the $100000 property in this example all of a sudden becomes a $250000 property because some people built or bought bigger and more expensive homes next door.

I’d encourage every property owner in NB to appeal you assessments every single year – make them work for your money … unless of course you know that you assessed too low, then just keep quiet.

Before anyone gives me heck, I know that taxes can still rise if/when the tax rate rises, but at least council or government will have to justify this rate increase and the voters can have a say.