Market Value vs Assessment Amount

We all remember a few years ago when Ontario switched to "market value" assessment.  When it happened they sent university students around after a brief instructional meeting to place market value on Peterborough homes.  They didn't do a very good job.

Many people's properties were valued too high and some too low.  The lows did nothing, (few complain that their taxes are too low) but the folks with the higher values filed for a re-assessment.  Flash forward a few years and look at assessment values today.

MPAC has updated their files with actual sale prices on a specific date, usually at least a year ago, so the amount is getting closer to actual market value but there are still many houses that are very under assessed.  These are the ones that buyers question when they view homes and think that the house is over priced becasue of the low assessment value. 

.MPAC looks at some key features:

• Age of House
• Building Square footage. (doesn't include basements, garages, decks, or porches)
• Location: ie urban, rural, waterfront, condo
• Lot dimensions: frontage, depth and total area
• Quality of Construction - This is broken down into 10 classes with 1 being very low and 10 being very high.  Class 6 represents the common standard of construction for the time it was built.  It is considered the benchmark class.

In addition MPAC not only values your property but it classifies it as well.  There are seven major property classes:

•  Residential
• Multi-residential
• Commercial
• Industrial
• Pipeline
• Farm
• Managed Forest

There are several sub classes for properties with specific and unique characteristics.

The assessment office only gets info on improvements that need a building permit.  If you have replaced you furnace, your roof and all your windows, they don't know about it but your market value would be much greater than a house that did not have those improvements.

The estimated value of a house is a certified appraiser’s opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; charges may vastly as per the location, area, and vicinity of the property. Market value is what price the house will bring at a given point in time. A comparative market analysis (CMA) is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.

For more information check out  http://www.mpac.ca/pages_english/property_owners/assessment_guide.asp