Elvis Cepus says he’s all for seeing his home in Vancouver’s Kerrisdale neighbourhood increase in value, but the one-third jump in his assessed value this year means his “ugly” bungalow has now hit nearly $1.9-million.
Mr. Cepus’s original 1955, 2,200-square-foot bungalow is just one of the West Side homes hit by assessment increases around 40 per cent higher than last year. While the average detached single-family residence, condo or townhouse in the city has gone up by about 16 per cent, the west side of Vancouver as well as the municipality of West Vancouver were hardest hit. Increases in those areas are typically around 25 per cent higher this year – and in certain pockets, such as Kerrisdale, the jump is more than 40 per cent.
Like everyone who’s sitting with a much higher assessment this year, Mr. Cepus is worried about tax increases come July. He realizes he got a deal when he purchased his house for $920,000 when the market had crashed in early 2009. Last year, when it was assessed at $1.385-million, he was shocked but pleased at the value of his modest, un-renovated house. This year’s $1.859-million assessment is a different deal.
“It’s the ugliest house on the street,” said Mr. Cepus, an engineer who lives there with his family. “We’re talking powder-blue bathroom and plywood cabinets in the kitchen.”
The home is valued at $17,000, so the value is in the 56-foot lot. He guesses the increase is due to large, 4,500-square-foot houses being built in his neighbourhood, driving up property values.
“There are massive houses being put up everywhere. I don’t have a leg to stand on, not if that’s what houses are going for, and that’s what comparables are doing,” he said. “But almost $1.9-million? Oh my God, when is it going to stop? The reality is people born and raised in Vancouver won’t be able to live in Vancouver anymore.”
B.C. Assessment Authority deputy assessor Grant McDonald, who covers the Sea to Sky Region, says part of the reason for an assessment hike is the increased volume of sales. With around 13,000 sales to look at for the region last year, the authority had a better idea of market trends in different neighbourhoods.
“This year seems to be a different story because all areas aren’t moving at the same rate,” Mr. McDonald said. “It’s simply a reflection of the market,” he added. “It’s the desirability of these particular areas… Once we see enough sales come through at these rates, we see a trend.”
Realtor Patricia Houlihan, who is also a lawyer, says she’s getting calls every day from people who wonder about appealing. But if the assessment is based on market value, there’s little argument to be made, she says. The widely held belief that assessments are always below market value is a myth, she says, and any assessments that were below market value have now caught up to reality.
The current assessments were based on market values as of July 1, 2011. Ms. Houlihan provided The Globe and Mail with assessments on several waterfront Point Grey Road addresses, and the typical 20-per-cent to 25-per-cent increase on those homes has meant assessment increases ranging from $2-million to $4.5-million. One of those homes is a two-storey duplex that was valued at $14.164-million last year and is now up to $17.638-million.
But she knows of at least one mid-market homeowner in a Cambie Street townhouse who faces an assessment that she believes is much higher than market value. “It’s a one-bedroom with an awkward, low ceiling upstairs and they’ve assessed it almost at $1-million. If the owner gets $800,000, they are laughing. Little properties like that have really gone crazy.”
Vancouver City Councillor Raymond Louie, who heads the finance committee, says a higher assessment does not automatically mean higher taxes across the board. About 60 per cent of the property tax goes toward the city, while the remainder goes to other services, such as TransLink, he says. And the city only raises taxes if needed to cover operating costs.
“If the city is stable in terms of how much it needs to run the city and if everybody’s home rises at the same rate, theoretically nobody gets a tax increase,” he said. “But because each property is unique and some rise by 10 per cent, and some rise by 20 per cent, then some taxes will go up.”
Generally, homeowners who fall below the 16-per-cent average, he says, may not get a tax increase by July, 2012, when the new assessments will apply. Those with higher assessments, however, will generally see a tax increase. The city averages out the last three assessments to help ease the tax load.
“If you are above the average, your taxes go up, and if you are below the average, then your taxes may actually go down,” Mr. Louie said. “I personally am quite surprised that BC Assessment has made this a single-year large adjustment – I haven’t seen it fluctuate in this fashion.”
The Assessment Authority’s appraisers look at sales and use city data on permitted renovations to help gauge home values. In some neighborhoods, street-front photos were taken to spot renovations or additions such as garages. Mr. McDonald says new technology that allows for such photography is just one way that future assessments will more accurately reflect market pricing.
He says that while everyone has the right to appeal, less than 2 per cent of homeowners do. He expects the majority of homeowners know that their assessments are fair.
“I think most realtors know very well what the market value is,” he said. “They advise people on that every day professionally, and we’ve seen some of these large increases. The public is reasonably well educated.”Report Typo/Error