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How Property Tax is Calculated in BC.

Real Estate Property Tax Calculation - Resider

Property taxes are considered to be the largest line item operating expense for a property. Real estate taxes are based on the assessed value of your property, as recorded by BC Assessment, which is the provincial Crown corporation responsible for classifying and valuing all property types in British Columbia. There are 9 prescribed classes of property under the Assessment Act, but the only one that would concern you is Class 1-Residential.

Tax rates can differ between municipalities (cities, districts, townships, and counties), as the taxing body reviews the annual budget to determine the amount of money that needs to be raised for services (fire, police, schools, waste management, etc.). Tax rates set by taxing authorities are applied to the actual value of a property less any applicable tax exemptions.

Each year, BC Assessment mails individual assessment notices to property owners across the province. Their role is to estimate the value of your property as of July 1st of each year, in its current physical state and permitted use (zoning). Elements contributing to value consider lot size, location, square footage, quality of construction, age, condition, parking, etc. All property owners receive their assessment notice in the mail in early January. Property Taxes are due the first working day after July 1st. If the property tax is not paid on time, the Local Government Act imposes a penalty of 10% for late payment.

What's the Difference Between Assessed Value and Market Value?

The assessed value should not be confused with appraised value. The assessed value of your property, although normally based on market value, is not necessarily equivalent to appraised value, and is more uniform from property to property. Assessors apply different methodology to determine property value, utilizing more of a ‘mass’ appraisal technique which can lead to three inadequacies:

• Incorrect methodology, such as a canned statistical package;
• Inaccurate data; and
• Inaccurate applications

Since the assessment roll includes all properties in the province of B.C. at one point in time, there has to be some level of automation in the valuation process, therefore opening up a possible margin of error. The automation attempts to compensate for the limited budget, time, and staff that assessment offices have to devote to the analysis of property data.

Disagree with your property assessment?
If you feel the value of your home is misrepresented, you are able to file an assessment appeal through a formal Notice of Complaint. The first level of appeal of a property assessment is to the Property Assessment Review Panel (“PARP”). The deadline to file a notice of complaint (appeal) to the Property Assessment Review Panel is January 31. PARP hearings take place between February 1 and March 15 each year. An appraiser is normally contracted for an assessment appeal, and will provide an independent opinion of value.

You can also apply for a Home Owner Grant on your principal residence before you receive your tax notice (by December 31st), which will reduce the amount of property tax you are required to pay.