PROPERTY ASSESSMENT APPEAL BOARD

PREPARING SUBMISSIONS ON THE CONSISTENCY OR FAIRNESS (EQUITY) OF YOUR ASSESSMENT

The Courts have interpreted equity to mean assessments should be set as the lower of either market value or an “equitable value”. Equitable value means if other similar properties are assessed below market value (on average), then your property is entitled to a similar level of assessment.

If you believe your property has been inequitably assessed, then you need to demonstrate that it is assessed higher (relative to its market value) than a group of similar properties. This requires a comparison of the assessments of similar properties and an analysis of their market values. Generally it is not enough to pick one or two other properties because equity typically requires evidence of a systematic discrepancy in assessments. One or two properties could simply be an anomaly and the Board will not usually make an equity adjustment on this basis.

A successful equity argument requires:

  1. defining which properties are similar to yours -- e.g., is your property ideally compared to the entire municipality, to the entire neighbourhood, or to a group of selected properties?; and
  2. establishing these other properties are assessed significantly below market value (typically more than a few percent), whereas your property’s assessment is at or very close to its market value.

To successfully argue inequity you should have market value estimates for your property and for any similar properties you are relying on. See the detailed steps below on how to prepare your equity submission.

Step 1: Calculate the “level of assessment” for your property

You must first have a market value estimate for your property on the July 1st Valuation Date. If you do not have this, see Preparing Submissions on the Market Value of your Property. You then determine the “level of assessment” by dividing your property’s assessment by its market value.

For example: If your property’s assessment is $85,000 and its market value is $100,000, then its level of assessment is $85,000 divided by $100,000 or 85%. This means the property is assessed at only 85% of its market value.

In steps 2 and 3, you will compare this level of assessment to that of other properties which sold in the area. Dividing assessed value by selling price gives the assessment to sales ratio or ASR.

Step 2: Define the appropriate comparison group

Decide what is the appropriate group for this equity analysis: all properties in the taxing jurisdiction, the entire neighbourhood, or a smaller group of properties. Is there some defining or distinguishing characteristics for your property and a smaller group of properties that separates them from the rest of the taxing jurisdiction or neighbourhood? For example, you could decide that waterfront properties should be compared to other waterfront properties. If there are no distinguishing characteristics, the Board may find that your property is better compared to sales throughout the neighbourhood or jurisdiction, rather than this smaller sample.

Step 3: Calculate the level of assessment for your comparison group

If you are comparing your property to your neighbourhood or taxing jurisdiction, then your local BC Assessment office may be able to provide you with the ASR statistics based on sales in these locations. See the Equity Statistics box for an explanation of how these statistics are calculated.

If you are comparing your property to a group of properties smaller than the entire municipality or neighbourhood, then you will need to research their assessments and market values (either sale prices - preferably adjusted to July 1 - or appraised market values). You then find their level of assessment by dividing their individual assessments by their individual market values. It may not be sufficient to pick only one or two other properties -- you will usually need to provide evidence for a larger group of properties in order to show a trend of over or under assessment.

See the Tips for Equity-Based Submissions for what assessment information you can obtain on individual properties from BC Assessment.

Step 4: Reach your equity conclusion:

Based on Steps 1 to 3, is your property inequitably assessed compared to your comparison group of similar properties? The following questions should assist you in determining whether your have sufficient evidence to support your case:

  • Is your property’s level of assessment significantly different than the average or median ASR for your municipality or neighbourhood (these statistics are defined in the below Equity Statistics box)? If the difference is small (e.g., less than a few percent), the Board may find that it is within the normal and acceptable variation expected when estimating property value. The Board and Courts have accepted that a range of appraised market values is reasonable.
  • If you have selected a smaller group to compare, is your property’s level of assessment significantly different than the ASRs from these similar properties? (e.g., more than a few percent)
  • Do the properties you chose represent typical properties in your area? Or, have you chosen only those that support your position? The Board will look for a balanced review of sales in the area. The Board tends to give less credence to “cherry picking” properties if there are others available that support a more balanced view.
Click on the following box for: Tips on Equity-Based Submissions

Equity Statistics

How do I obtain equity statistics?

Call your local BC Assessment office to request the equity statistics for your jurisdiction and/or neighbourhood. They may provide information at your request or during the telephone appeal management conference. Usually BC Assessment will need to run a special report for your neighbourhood statistics. Contact the Board if you have difficulty in obtaining these statistics and the Board may be able to assist.

What are ASRs?

Assessment to Sales Ratios (ASRs) are calculated by dividing assessed value by selling price. ASRs are usually described as an average of results from many properties, either the median (middle value) or mean (average). You may ask BC Assessment for the average ASR for your jurisdiction and for your neighbourhood. This will show the relationship between assessed and market values for all properties sold within a few months of July 1st. An average ASR close to 100% (or 1.00) means assessed values are, on average, close to market value. An average ASR of 70% would mean sold properties are, on average, assessed at 30% below market value or under-assessed. An ASR of 115% means sold properties are, on average, assessed at 15% above market value or over-assessed.

What are CODs?

BC Assessment may also provide you with a related statistic - the coefficient of dispersion or COD. The COD indicates how widely spread the ASRs are from the average. The smaller the COD, the more confident you can be that the ASR average properly reflects the relationship between assessments and market values. For example, a COD of 15% or less indicates reliable ASR results (i.e., you can be confident that individual ASRs are generally close to the average ASR statistic). A large COD, say above 20%, would mean ASR results are not particularly reliable.

An example may help illustrate the concept of how CODs measure the quality of the ASR statistic. Consider Sample #1, which has five ASRs: 100%, 90%, 110%, 115%, and 85%. Sample #2 has five different ASRs: 25%, 175%, 4%, 196%, and 100%. Both samples have an average ASR of 100%, which appears to be a very good result. However, Sample #1’s COD is 10% and Sample #2’s COD is 68%. Looking at the CODs reveals that Sample #1 offers much more reliable results, in terms of confidently stating that properties are on average assessed at market value.

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