Welcome to 2022. The year has just started, and you are right about to get your property tax assessment notice in the mail. The problem is the number that you’re going to get on that notice is going to be astronomically higher than what it was from the previous year. So let's understand a little bit about what happened in 2021, what's going to likely be on your tax assessment, and what does that mean in terms of are you really going to pay more money this year in your taxes. Let's get into it.
So here's the scoop. Property assessments are going to be way, way up since this time of last year. For all property types in the Fraser Valley, we saw an increase of over 30% on average for properties from July of 2020 to July of 2021. The reason July is important is because that is the month of the year where the Tax Assessment Authority goes and reveals and researches pricing. For those of you that live in the city of Surrey, you're going to see your assessment prices go up anywhere, really between 20% to 30% because that’s what the increases were from July to July. Now this is going to blow a lot of your mind, just in fact, that the increases have been so large. But the biggest question a homeowner’s going to have is "am I going to pay more in my taxes this year?"
Any day now you’re going to be receiving a notice in the mail from the BC Assessment Authority, if you haven't already outlining what your taxes for 2022 are going to be. I've got some really great news for you! If this is a concern that you are indeed going to pay some more money this year, let's demystify this a little bit first by stating that the city calculates the amount of money it needs for taxes long before these assessments are released. Just like any company, the city has a budget and they know each year how much they're going to need to really operate the city in terms of needing things like policing, fire, hospitals, road maintenance, all the sort of stuff that your taxes go towards, including schools. Most cities fight very hard to keep this as low as possible because they want more people to move to their city and they don't want angry emails from people like us homeowners saying “I pay too much in taxes."
So it's worth noting that when your assessment goes up, it doesn't necessarily mean that you're going to pay more taxes this year, because everybody is going to go up. Everybody's assessment values going up has very little impact on what the city is actually going to take, because that budget is already decided. What it does impact, though, is you will pay more taxes depending on how your tax assessment moves in comparison to the others in your neighborhood.
Let me give you an example. If everybody in the neighborhood moved up 10%, your taxes are not going to be any more expensive this year than they were last year, excluding any increases that the city is likely going to have year over year. The city, of course, likely is going to have increases because you know what? Things get more expensive. Inflation is really bad right now, and they're adding new roads, new services, new schools, and trying to always be better. Plus again, stuff gets more expensive. So the city usually is going to raise their taxes every year within a couple of percentage points or so.
This doesn't really matter to you as a homeowner, though, because if your assessed value goes up and it goes up on par with everybody else's, you're not taking on a bigger share of the tax burden for the city. Where you do run into a problem, though, is if your taxes go up higher in proportion to everybody else’s, think of it like a really big pizza. We all like pizza, so this should hopefully sink in for everybody. If we cut a pizza up into equals size slices, then everybody gets a piece and the pizza itself kind of represents the city's tax base and how much they need. Regardless of how big that pizza actually gets, everybody is going to share in an equal size slice when it’s all cut up. The problem becomes when those slices are no longer equal in size. So maybe I have a bigger piece than you, meaning I'm getting more pizza. In this case, that means I'm going to pay more taxes than you because I’m taking a bigger piece of the pie.
So when you receive your tax assessment in the mail or if you've already got it, be sure to take note of how your value changed in comparison to everybody else in the neighborhood. This way you're going to know if your taxable portion has gone up compared to everybody else. Or sometimes it might have even gone down. And if it's gone down, well, that's kind of a good thing, isn't it?
You have until the end of January to dispute your tax notice. And for any of our watchers or clients out there, we're here to help. If you want to dispute your tax notice or are just curious on what the value of your property may have been in July of last year when they were doing these assessment numbers, reach out to us in the email below or schedule a call with the link below. We'll arm you with information to make sure that you know exactly what your property was worth in July of last year. And if you do need to fight it, we'll give you the information to help you do so.
Happy New Year to all of our viewers.
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