PROPERTY ASSESSMENTS in Terrace have increased $30 million, from $1.16 billion last year to $1.19 billion this year.
Many residential owners will see a five to 10 per cent increase in the assessed value of their property.
Some of the overall growth, $4.8 million, includes subdivisions, rezoning and construction.
The average home in Terrace’s Bench area has jumped 6.7 per cent, the Horseshoe 6.1 per cent and the Southside 9.8 per cent.
Commercial and industrial properties have adjusted in a range of five per cent less or more as well.
This year’s assessments are based on market conditions of July 1, 2011.
The information came in a press release last week from the BC Assessment Authority, the crown corporation that determines fair market values for homes. Those values are then used by municipalities to determine property taxes.
City finance director Ron Bowles said there are some common misconceptions about how assessed property values actually affect the calculation of taxes.
The biggest misconception is that higher assessment values mean higher taxes.
“Often people think my assessment came out, then I’m going to get 10 per cent more taxes,” said Bowles, explaining that the total amount the city needs to pull in yearly to administer services is set by the cost of services, not property values.
“We need $20 million to run the city,” said Bowles. “Assessments help us to distribute that cost to the taxpayer.”
If all properties rise or fall in value equally, then property tax rates stay the same.
Based on the same assumption, property taxes would then rise or fall with the addition or cancellation of services.
The exception to this comes with expansion, meaning if there are more new buildings to tax, the city can increase its services at no additional cost to taxpayers.
“Often cities in expansion mode can use this to grow their budget,” said Bowles.
But taxation rates do come with a certain degree of flux even when the budget stays the same, he added.
This is where assessment values have influence.
The percentages by which different properties rise and fall determine the percentage of the tax pie each shares.
So, the degree of fluctuation comes from the differences in percentage of increase or decrease. Adding to this, there are set percentages of the budget that different classifications of property share, like residential, industrial and so on.
Property owners who think an assessed value is either unfair or incorrect can appeal the assessment authority’s findings.
Properties are assessed taking into consideration land title changes, building permit approvals and zoning adjustments, as well as unique property characteristics like location, size, layout, age, shape, finish, quality, carports, garages, sun decks and condition of buildings.
Local realtor John Evans warns that people should not rely on assessment value to determine market value as assessments are for tax purposes only.
“There’s really no correlation between your assessment notice and what the actual value of your property would be,” he said.
Current market value of a property is best determined by a real estate agent who has knowledge of sales activities and prices within specific areas or by an appraiser, said Evans.