[Glen]

How close to market value is your assessment? The last assessment period was based on a valuation date of December 31, 2008. Thinking about values on that date, how would you rate the accuracy. On average, the people I asked, said that their assessments typically were about 85% of the estimated true market value.

 

[js97]

In general, i think they are okay, BUT I don't think they are very accurate on Condos though.

I remmeber my new condo assessment was about 10% over market value. This was back in 2006 though. I sold it back then, and yes, about 10% less than MPAC.

It's somewhat of a conflict of interest for MPAC to be assessing homes as they receive a percentage of assessed tax values... 'non-profit' lol.

 

[Glen]

On a number of occasions I have looked that the taxes on homes sold in the newspapers, and calculated the assessment values used to derive the tax burden. There are many examples of homes being assessed for far less than (~60-70%) of the sales price. Condos tend to be more accurate, with some cases of over assessments.

 

[nfitz]

How close to market value is your assessment? The last assessment period was based on a valuation date of December 31, 2008.

My last assessment date as January 1, 2008 ... not December 31, 2008.

And it was about $70,000 high ... $450,000 instead of $380,000.

And I know that my house wasn't worth $450,000, as we bought it in November 2007, closing early in 2008; right near the assessment date. When we brought it, it had been on the market for about $440,000 for several months ... and wouldn't sell; in a neighbourhood and time which was quite hot.

So after some discussions, and particularily evidence that it had been listed for sometime for sale at the higher price without selling; they agreed to reassess it.

Looking at the assessed value of many of my neighbours ... most seem reasonable though.

 

[TrickyRicky]

Glen, I would say that MPAC is generally accurate. The reason I say generally is it tends to be a good average indicator of value, or at least the value as of the last assessment period. Property value is actually a fictitious number, everything is relative and reasonably subjective. Something like 1/3 of households fight their MPAC assessment as there is a natural incentive for owners to under-value their property assessment. In theory then you would suspect that MPAC tends to undervalue the value of property on say a given street based on current average sale prices. Because assessments have been frozen for some time they are far less accurate now then they were back in 2008. The sale history of a property is another issue. If the property has been sold or sold several times in the last decade or so it will tend to have a more accurate assessed value vis-a-vis a property that hasn't been sold since 1970.

Contrast this to other measures of property value such as for insurance or financing. Insurers will always grossly over-value your property in order to maximize premiums. Banks strategically undervalue your property for financing. The manner in which banks and other lenders tweak their property valuation strategies may seem like small details, but they are small details that turn into home price game changers.

 

[nfitz]

I guess to summarise what I was saying. Yes, it's generally accurate ... but sometimes for an individual property, there is a factor at play, that there system doesn't capture, that decreased (or perhaps increases) the value of a particular property.

For example, two identical properties ... on the same street. One might back onto a ravine, while the other only backs onto other houses. The first would have a boost in value that would not likely be captured in their methodology. So their property valuation would likely always be below the market value.

In my case, I bordered one alley, and my property was much higher than a second alley only 20 feet from my property, so we have a great view overlooking old garages, old cars, and two collapsed structures. I think it's great myself!! But it does seem to devalue the house ... and that's not caught in my valuation. Neither is my proximety to an artery (which isn't captures because I'm only very close, rather than immediately adjacent) ... yet I still see streetcars out of my back windows, and hear them through the front ...