From time to time, we receive emails asking why the "Market Price" we give in a home evaluation differs from the City of Calgary assessed price. In the current Calgary Real Estate market, assessments are typically higher than market value. This is because the assessment is based on the approximate value last summer. In Calgary's dynamic market, assessed value is often not accurate.
Even though the assessed value is a tool when preparing property evaluations, the ultimate value is determined by comparison to similar properties that are on the market and those that have recently sold. As with any other commodity, in the end, supply and demand dictate what something is worth. The market governs prices.
While assessments are a tool for determining value, the market is governed ultimately by supply and demand. In the 2006 market properties were selling for higher than their assessment from the city. In that market the buyers were saying just the opposite of what you are now saying. " The assessed value is lower so that is what it is worth." After losing out on a few properties to competing buyers they learned that the market determines price. In today's market, prices have fallen somewhat since the assessments were taken resulting in assessments being high relative to market values.
This does not mean that you are paying too much in property taxes, because the assessment is used to determine a fair distribution of the city's tax burden. As long as your value is relative to other Calgary properties, in general, the taxes work out to be equitable. If everyone's values were lower, the mil rate would be increased to distribute municipal expenses. Currently market values tend to vary 5 to 10% off of the city's assessed value, although I have seen as much as a 25% discrepancy. Curious how much your property would sell for in todays market? visit www.CalgaryHomePros.com and request a free home evaluation.
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