Ugly and overpriced: assessment appeals turn realty world upside down
Overheated B.C. housing market has seen residential property assessment appeals soar in recent years
It's the opposite of B.C.'s reliably boastful real estate market.
Prompted by the annual release of property assessments, thousands of homeowners across the province will spend the coming months highlighting flawed construction, poor views, noisy neighbours and over-hyped market conditions in bids to convince authorities their homes aren't worth as much as one might think.
Although higher assessments won't necessarily result in higher property taxes, the fear of bigger bills motivates many to appeal. Houses valued at less than $1.65 million are also eligible for a homeowner grant worth between $570 and $1,045.
But at the end of the day, only facts count.
"You have to have actual — not emotional — evidence," said Steve Feldman, administrator of the Property Assessment Review Panel, the first of two bodies that hear appeals about home valuation in B.C.
"It has to be something [a panel] can see that affects value."
Appeals on the rise
British Columbians have until the end of January to launch appeals. Then, dozens of three-person review panels have until March 15 to hear arguments and make their decisions.
Feldman says property owners are encouraged to bring pictures, videos and recordings to bolster their arguments.
Last year, 27,903 property values were contested, an amount B.C. Assessment points out is only 1.38 per cent of the more than two million properties it assessed. But that may represent a bit of underselling in itself. Assessment appeals have risen from 17,874 since 2014 — an increase of about 56 per cent overall.
If owners don't get their way, they have until the end of April to file a second appeal with the board.
Only a fraction of cases carry on to that second, and final, level. And most concern commercial properties.
But board chair Simmi Sandhu says the number of residential appeals almost doubled last year from 375 to 689.
Sandhu wouldn't speculate on the reasons for the increase. But a number of decisions posted on the board's website raise the red-hot market as an issue.
Board rulings, unlike the verbal decisions of the panels, are published and provide the only window into the process. It's one of rare modesty in a field normally dominated by braggarts.
'Frenzy' made him do it
One Langley man argued unsuccessfully that market "frenzy" drove him to pay $31,000 more than the list price for his single family home; He was fighting an assessment of $905,000, which was $5,000 more than he paid.
"The appellant submits that as a result of the inflated market and fear of missing out on the purchase, he overpaid for the property," the decision reads. "The appellant submits that this constituted 'duress' and results in the price paid not being reflective of market value."
The board ultimately ruled that while "fear of missing out can undoubtedly alter a person's purchasing decisions," it hardly amounts to duress.
A North Vancouver man came to his equally unsuccessful appeal armed with Canada Mortgage and Housing Corporation documents on overinflated property prices and news articles "commenting on rising house prices."
The board said the man's concerns about home prices were "shared by many people" — but weren't relevant to the question of the property's actual market value on the date of assessment.
'Foul aromas' and 'masculine' decor
One Vancouver man noted that the bedrooms in his $1.6 million condo overlook streets with parking entrances and buildings. He described his colour scheme as "masculine."
Another appellant argued that the value of his very steep, West Vancouver waterfront parcel of land was impaired by the "foul aromas" wafting from a nearby sewer pump station. The property's value jumped more than 50 per cent to $2.2 million in 2017. The appeal board upheld that value.
Still other appellants complained of traffic noise and "dense and mature coniferous trees" blocking their views.
Even the owners of high-end realty appealed. One couple argued the value of their Point Grey home should be set at $15.8 million — as opposed to $17.6 million. They were only partially successful, dropping the assessment by $228,000.
That came after intense — and often arcane — examination of the high-end market, comparisons with houses of similar age and property size and analysis of "time adjusted sales-prices."
It was a slight drop compared to the overall price, but one the board essentially said should not be sneezed at.
Feldman says appellants need evidence of comparable sales and the actual prices fetched by similar properties, not just the MLS listings. He says it's hard to predict at this point how many appeals 2018's crop of assessments will yield: "It's a bit of anticipation."