I wasn’t sure quite how to react when I opened my property assessment notice earlier this month, although now I know the appropriate response is to laugh.
I was taken aback that the assessed value was significantly lower — upwards of six figures — than what we had paid for the place last summer, so my initial thought was something along the lines of: “That’s really what they think this place is worth? Well, they’ve been smoking something.”
I quickly got beyond the insult of the comically low assessment by comforting myself in the knowledge that a lower figure simply meant I’d receive a more palatable property tax bill come spring. After I did a bit of poking around on the Town’s website, however, I found that won’t necessarily be the case.
You see, pretty much every Okotoks homeowner is in the same boat as I am because as much as it’s suggested that assessments are based on the market value of a property on July 1 of the previous year, that doesn’t appear it’s actually the case.
I had a look online at houses currently for sale, plugging the addresses of 10 randomly selected places into the property assessment search tool on the Town’s website in an effort to compare list prices to assessments. I looked at addresses all over town — from Cimarron and Drake Landing to Sheep River and Mountainview — and what I found is the discrepancies between the two numbers are vast, even staggering in some cases.
Granted, list prices are simply what the homeowner is asking, and not necessarily an accurate value of the property, but from my limited experience around here the two are fairly close as there typically isn’t a lot of room to negotiate. What’s more, the real estate market in Okotoks peaked last May and has declined gradually since that time, so if anything, prices should be lower today than what they were back on July 1 when assessments were determined.
I acknowledge that it’s not an apples-to-apples comparison, but even taking that into account, it's still difficult to reconcile the two numbers given they’re not even in the same ballpark for property after property. Only two of the 10 homes I selected had an assessment within $100,000 of their list price, while two others were assessed more than $200,000 below their asking price, including one whose assessment was a whopping $248,000 under the list price.
When I took the difference between the list price and assessed value for all 10 it showed an average discrepancy of $150,000, which means either every homeowner is asking way too much or the assessments aren’t as reflective of market value as we’re led to believe.
In a way, it’s actually a pretty clever approach, one that will almost certainly minimize appeals as who's going to quibble when you get an assessment that’s a hundred grand or more less than what you think your place is worth? If that’s the case, you’re going to keep quiet in the hope that you make out like a bandit when property tax bills arrive.
Something tells me, however, that’s not going to happen for all of us.
