Kitimat property owners’ taxes may not increase despite a sharp rise in the average assessed value of property of 41 per cent.
Kitimat realtor Graham Pitzel said the increase, while large, is totally justifiable.
“We have had a few years of very depressed values pre-LNG Canada FID, and this just brings properties up to realistically where they should be,” said Pitzel.
“This is the first assessment taking values of post-FID properties – the last values were from July 2018. The certainty in the town that there would be economic opportunity for everyone has caused the market to recover.”
He said BC Assessment’s adjusted rate for Kitimat could potentially mean a few things.
“If your property went up the same amount as everyone else’s, your property tax amount should not change substantially,” he added.
Pitzel explained that the District of Kitimat calculates how much money they need in a given year and divides that cost between all the properties in the district.
“Your value does dictate your proportion of taxation, but only in relation to the difference between your property and others in town.
“If your property is worth $200,000 and another is worth $400,000 and they both increase 41 per cent, then both tax rates will essentially remain the same for the district taxation.”
He said provincial tax portions will change slightly as well, but in relation to what the value of the properties changed compared to other properties in the province.
“It uses the same formula, with a larger base to pull from. Obviously any actual taxation changes by the district and the province will cause taxes to go up or down outside of assessed values.”
He cautioned property owners from making any drastic decisions in light of the 41 per cent increase.
“The smart thing for homeowners to do with their new assessments is probably nothing. Unless you believe your value went up more than it should have in comparison to other properties, then you can call BC Assessment for them to look at it and see if they agree that your property is now overvalued.”
He said property owners can check whether their property value has increased by visiting BC Assessment’s website.
Asked whether the higher assessments would make it harder for buyers to get into the market, Pitzel said the higher actual sales prices may be a deterrent for first-time buyers.
“Assessed values and sales prices are not always relatable, especially with the assessed values lagging quite a bit. The new values are from July 2019 and will be effective until January 2021, which in that time period we will probably see a shift in values as workers and investors come to our community.”
With the mortgage stress test the federal government has implemented, along with higher purchase prices, first-time buyers in non-industrial positions may find themselves being priced out of the market.
“We have enjoyed years of low prices – now we will more than likely follow along the lines of larger centres such as the lower mainland, where you get into the market and then move up as careers and values of properties change.”
“In my opinion, these new values just bring us up to where we should be. Costs are rising in every aspect of life, and property values are no exception.
“The cost of building a detached home here is roughly $200 per square foot, with land somewhere between $150,000 – $225,000. This equates to a fairly expensive cost to build new homes, so the intrinsic value of older properties should be reflected in the assessment.”
He said potential buyers can still get into the Kitimat property market for between $175,000 and $200,000 for an attached unit that in a good condition.