Penticton properties north of Eckhardt Ave. will likely take the biggest hit on a municipal tax increase this year, with recently assessed property values in that area through the roof.
South Okanagan real estate values continued to skyrocket last year, with recently released B.C. Assessment data showing a major bump to single-family and strata property values last year in most markets, with Penticton’s average single-family home cracking the half-million-dollar mark.
B.C. homeowners should be receiving their assessments in the mail this week, and Penticton and Summerland both saw a 16-per-cent increase in the value of the average single-family home, with Osoyoos at an increase of 17 per cent and Oliver at 14 per cent.
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“What we look at is market value, so what the average house would have sold for around last July 1,” said Tracy Wall with B.C. Assessment. “What we do is we report market activity from that time period, and we look at sales both before July as well as after July, so from the spring through into the fall.
“Based on that activity, what was happening in those marketplaces last year, this is what we determined the assessments to be.”
In Penticton, the average single-family house is now worth $502,000, whereas strata properties, which went up 15-per-cent in Penticton, are worth $284,000 on average. In Summerland, the average single-family property is worth $582,000, while Osoyoos clocks in at $472,000 and Oliver at $327,000.
The 16-per-cent hike in values in Penticton last year more than doubled the year previous, at an increase of just 7.3 per cent.
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City of Penticton chief financial officer Jim Bauer sought to remind property owners a 16-per-cent increase in property values doesn’t mean a 16-per-cent increase in property taxes.
“Certainly most people’s immediate thought is ‘oh, 16-per-cent increase in my assessment, are my taxes going up by that amount?'” Bauer said. “That’s certainly not at all the case.”
That’s because property taxes aren’t entirely hooked on property values — the tax is based on how much revenue the city needs to bring in to pay for expenditures, and only after that is set are the taxes tied to property values.
What will make a difference is how much a property’s value has gone up relative to the average. Discrepancies between different areas of Penticton will mean different neighbourhoods will likely carry more of the tax increase than others, and it appears the area north of Eckhardt Ave. will be hit the hardest.
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“Typically the average home on a city lot in Penticton increased by 16 per cent, but … some may well have gone up a little bit more than that average, and some may have gone up a little bit less,” Wall said.
In a follow-up email, Wall provided a snapshot of five Penticton neighbourhoods and the change in their property values for single-family homes.
North of Eckhardt is where properties saw the greatest increase at an average of 22 per cent, while the Duncan Ave. area east of Main Street bumped up 20 per cent in value. The Redlands area to the east of downtown increased 18 per cent on average, according to Wall.
But the Skaha Lake waterfront and the Naramata Road and North Bench areas saw significantly more meager increases, at two and three per cent respectively.
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Areas with a more rapid increase in value should all see greater increases in property taxes this year, according to Bauer, while on the flip side properties in slower-growth areas should see their property taxes increase more slowly.
City council tentatively approved a 3.44-per-cent property tax increase in November for 2018, which comes out to an estimated increase of $14.90 per $100,000 in assessed property value. That would mean an increase of about $75 for the average house and an increase of under $45 for the average strata property.
The general increase in property values should come with little surprise — South Okanagan Real Estate Board past president Pamela Hanson told the Western News in several updates on real estate sales last year most of the record-breaking sales came from property values.
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In fact, the South Okanagan saw marginally fewer sales than the year previous, according to SOREB data for November 2017 and the same month the year previous. Year-end data has not yet been published by the real estate board for 2017.
Two Trout Creek properties were the only South Okanagan spots to make the B.C. Assessment’s top-100 list of property values in the Thompson-Okanagan region. One ranked at number 53 on the list at under $5.2 million, and the other ranked 100 at $4.5 million.
But even the most valuable residential property in the region, a Kelowna residence at over $10 million, didn’t crack the province-wide top-500 list, with the number 500 property at $12.6 million.
The most expensive residential property in B.C. is a Kitsilano, Vancouver mansion on Point Grey Road, valued at nearly $79 million.