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Calgary Property Assessments: Fact or Fiction?

Posted by Jim Sparrow on Friday, October 21st, 2011 at 4:53pm.

2 out of 3 Calgary homes sell for less than Calgary assessed tax value

 You're considering selling your Calgary home, and after speaking with your neighbours you decide to check the city of Calgary's Property Assessement webpage. You're pleased by the results - they confirm what you thought your property is worth.

What if I told you that more often than not, the assessed value that the City of Calgary has you paying taxes on is higher, occasionally by as much as 20% or more than the current market value of your Calgary home?

I randomly chose 15 Calgary properties that have sold this month (October 2011) in all price ranges and compared their sale prices to the posted assessed values on the city's website. The results are shown in the table below. Due to privacy laws I'm not allowed to display house number - instead I've indicated the block and Calgary community the properties are in. I've also shown how much each property sold for on a $ per square foot basis.

Calgary Real Estate Sale Price vs City of Calgary Assessed Value

Calgary Sale price vs Assessed Value for all price ranges - October 2011

How Assessed Value Compares to Actual Sale Price

  • Difference between Sale Price (SP) vs Assessed Value (AV) averaged 14% for the 15 properties
  • 67% (10 of 15) of these properties sold for LESS than what the City of Calgary had the property assessed at
  • 33% (5 of 15) of these properties sold for MORE than what the city had property assessed for
  • 27% (4 of 15) of these properties had a sale price that was under Assessed Value value by a margin of > 20%
  • Just over 1/4 (4 of 15) homes sold for within +/-5% of city Assessed Value
  • The property with the greatest difference between Assessed Value and Sale Price was the least expensive sale (sold for $105,000, 41% less than Assessed Value)

What this means to you as a Calgary taxpayer

The City of Calgary assessed property value is meaningless in determining the current market value of your Calgary home / condo

Simply put, the City of Calgary has a lot of work to do on their property assessment process. 2 times out of 3 they over-assessed properties, including Calgary homes, condos, and vacant land. More than a quarter of the time Calgary properties are over-assessed by a margin of greater than 20%. Only 27% (4 of 15) of these Calgary properties sold for +/- 5% of the city assessed value.

If you're planning on selling your Calgary home or condo call a Professional. Our team of Calgary REALTORs would be pleased to provide you with current and relative sales comparables for your specific community, along with advice on recent market trends. There is never a good time to over-price your Calgary home, this is doubly so during the colder winter months.

 We'd like to hear from you. Please feel free to leave your comments and any thoughts below

 Jim 

 

If you're looking to sell or buy, do not hesitate to contact us.

We are prepared to work hard ensuring that your needs are met and that the result is more than you were hoping for. Nothing gives us more pleasure than your success and being with you through major life changes.

9 Responses to "Calgary Property Assessments: Fact or Fiction?"

Kelley Skar wrote: Great article Jim. I believe the city simply does not have the manpower to be able to accurately assess homes here in Calgary. The way you and I do our assessments may be the same as the city but our info is current when presented to a seller.
Great breakdown! Thanks for the excellent explanation.

Posted on Friday, October 21st, 2011 at 10:15pm.

Jim Sparrow wrote: @Kelley: Thanks Kelley. My hope is that Calgary properties owners will begin to see that what the city has their home or condo assessed at bears no relationship to what the current market value is. As any competent REALTOR knows, market value cannot be accurately gauged without physically seeing the property, both inside and out. I believe the city does the best job they can, but they're limited to using statistical analysis *multiple regression analysis* rather than putting boots on the ground and actually seeing the properties.

Posted on Saturday, October 22nd, 2011 at 8:20am.

Justin Havre wrote: Great Post Jim! Our job as Realtors in Calgary is always battling the home owners assumption that the Assessed Value set by the city is what their home is worth in the market. I almost wish the city would find another way to assess our properties to dictate how much we pay in taxes. This truly gives Calgary Home Owners a false sense of Value when they may not be educated on what is going on in the current real estate market. I am just off to a listing appointment this morning where the city assessed value is almost 20% higher than market value and the seller "thinks" their home is worth even more than what the city has it assessed at......off I go with my Reality Bomb.

Posted on Saturday, October 22nd, 2011 at 9:07am.

Jim Sparrow wrote: It's always the same battle Justin. I've come to the conclusion that many homeowners conclude that the city assessment is a "written in stone" valuation on their property. I usually ask them how they believe the city can accurately value a property without ever seeing it. Then I too drop the ~Reality Bomb~. Good luck brother!

Posted on Saturday, October 22nd, 2011 at 9:15am.

Ron Roy wrote: Good post Jim. Most people do not realize the way assessments are done. In your example the assessments were based on the city's estimate of value in July 2010. This was derived by studying the 2 previous years of sales to find a median. They really have limited applicabilty to current values even if they might have been accurate at the time they were done. Our Market Evaluations are based on current sales and local knowledge. Keep up the informative posts.

Posted on Saturday, October 22nd, 2011 at 1:20pm.

Jolenta Averill wrote: Excellent post, Jim. We endure similar battles in my marketplace when confronted by the data in our city assessments. Thankfully, a lot of consumers are starting to catch on that house prices and assessed values often bear little in common, however more often than not sellers still stubbornly bury their heads in the sand when it comes to this topic. That's when we have to go to work and get them to do a serious reality check! Thanks for a first-rate, informative post.

Posted on Saturday, October 22nd, 2011 at 10:26pm.

Devin TM wrote: While it is great to get this type of comparison, the conclusions presented are not completely accurate according to the data supplied. The percentages given should be reversed (Sales Price vs Assessed Value should be positive if above the assessed value or should be stated as Assessed Value vs. Sales Price). Either way it is looked, there are no properties that sold for more than 20% (highest being 19% for house #1) - You indicated that there were 4 - This number represents those selling for less than 20% of the assessed value. Finally, there are 4 properties selling for +- 5%, not the 3 presented (Houses 2,7,11,12). With this in mind, your statements throughout the article need to be updated. Anyways, I hope you continue with your comparisons.

Posted on Monday, October 24th, 2011 at 9:29am.

Jim Sparrow wrote: You're absolutely correct Devin. Thanks for pointing out the errors - all have been corrected.

Posted on Monday, October 24th, 2011 at 11:34am.

Bo Kauffmann wrote: It appears that Winnipeg is not the only city where City Assessment Values have no real relationship to Market Value. In our case, City Assessed values are most often 10 to 20% BELOW actual market value. I always caution home owners against using those figures to establish their home's value.... Instead, get a good REALTOR® to perform a market evaluation (in person, NOT over the internet) and in the end, the MARKET will tell you what your home is worth.

Posted on Monday, October 31st, 2011 at 9:43am.

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