Economics 101 taught me that high demand and low supply results in higher prices.
Add in historic low interest rates and the result: home prices have increased all across B.C.
The question is what does this mean for your assessment and your property tax bill?
BC Assessment takes in the sale information from houses near you and then aggregates it across your neighbourhood. Their computer model then makes a very educated guess as to what your home is now worth. According to BC Assessment, the average home value in Salmon Arm went up just over 30 per cent as of July 01, 2021. Did yours go up more? or Less? This is what will affect your property tax bill.
The fact is that property values don’t tell cities how much tax they will bring in, they only determine how the tax bill will be split up among residents based on how much was collected last year. The professionals in the finance department use a mill rate to adjust taxes accordingly based on that assessment average. So if your assessment went up more than 30 per cent, you are going to pay more for your share of city costs. Less than 30 per cent, you might be happy about that now as you might not be affected as much by the 4 per cent tax increase in 2022.
One myth I am trying to bust here is that the increase in property values that residents are experiencing will result in an increase in taxes or a windfall of revenue for the city. This is not true. New revenue comes from growth in building permits and a tax increase from council. The truth is that staff and council are doing our best to manage those taxes efficiently while continuing to deliver services at the highest level possible.
Chad Eliason is a councillor for the City of Salmon Arm.
Read more: Most Salmon Arm properties see 2022 assessment jump more than 30 per cent
Read more:‘Fight it’: Spike in assessed property values prompts Shuswap woman to start petition
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