Property assessment roll: variations and their impact
Published on November 14, 2024
Rising property values in many Quebec municipalities are raising many questions among homeowners. At a time when real estate market prices are fluctuating significantly, it's essential to understand how the property assessment roll process is carried out, what methodologies are used to calculate it, and what impact these increases have on homeowners.
The mechanisms of property assessment need to be clarified.
Contents:
- What is the property assessment roll?
- Difference between a municipal property assessment and market value
- Does a municipal property assessment have an impact on market value?
- Access the 2022, 2023 and 2024 assessment rolls
- Discover the 5 steps to request a review of your property assessment roll
- FAQ
What is the property assessment roll?
The property assessment roll is an official document that lists all the real estate properties in a municipality, specifying their cadastral value. This assessment serves as the basis for calculating municipal and school taxes. It enables tax authorities to determine the taxable value of each property, taking into account criteria such as surface area, location and use.
Different valuation approaches
There are three main approaches to property valuation.
Comparative approach
The comparative approach consists in valuing a property in parallel with other similar properties recently sold.
Replacement cost approach
The cost approach assesses the value of an asset based on the cost of its construction or reproduction, taking depreciation into account.
Income approach (for income-generating properties)
L’approche par le revenu est utilisée pour les biens générant des revenus, en estimant leur valeur selon les revenus qu’ils produisent.
Difference between a municipal property assessment and market value
A municipal property assessment and market value are two distinct concepts. While both relate to property value, they are used in different contexts.
A municipal property assessment, carried out by the municipality at regular intervals (every three years), serves mainly to determine the property taxes that homeowners have to pay. This assessment is based on objective criteria, including lot size, age of a building, its general condition and recent sales of comparable properties in the same area. However, it may not reflect a home’s current market value as it doesn’t take into account short-term price fluctuations or a property’s individual features.
On the other hand, a property’s market value is defined as the price it could be sold for on the market at any given time. It involves several factors, including supply-demand in a geographical area, local economic trends as well as a property’s unique features, such as layout, renovations or even popularity of the neighbourhood. Unlike a municipal property assessment, market value is more volatile and can vary in response to real estate market conditions.
Does a municipal property assessment have an impact on market value?
Despite the fact that the property tax roll has grown significantly in several municipalities, it should not be used to set a purchase or sale price, according to Marlène Bates, appraiser and DuProprio ambassador.
“It could be misleading to rely solely on a municipal property assessment. Firstly, it’s because the market may have experienced significant fluctuations since the reference date,” she explains. “Secondly, work may have been done since a municipal inspector last visited. This kind of situation can create a gap between a property’s municipal and market value, especially when filing a new triennial property assessment roll.”
So, according to the expert, the property assessment roll should be taken with a grain of salt when the time comes to set an asking price. It can be used to anticipate property expenses but not to assess a home’s market value.
Learn more about how to set your asking price.
Access the 2022, 2023 and 2024 assessment rolls
To access the property assessment roll for 2022, 2023 and 2024, visit your municipality's website - this information is often available online. If not, you can contact your city's property assessment department or go directly to city hall to obtain the details. The information is also available on your tax bill, which indicates the cadastral value of your property.
Annual and triennial rolls
The main difference between annual and triennial assessment rolls lies in the frequency of assessment. The annual roll is updated every year to reflect current property values, enabling regular property revaluations and annual tax adjustments. In contrast, the triennial roll is updated every three years, and property values remain fixed during this period, unless specific changes occur (e.g., major renovations). Triennial rolls therefore provide a more stable assessment over several years, while annual rolls offer a continuous and more frequent revision.
Major changes by property category
For residential properties, value is often determined by comparison with sales made 18 months ago, while for commercial or industrial properties, the income approach is generally used, based on expected rents and yields. Vacant or agricultural land is valued according to its potential use and land demand. Each property category therefore has its own specific criteria which influence its value evolution.
Variations in Québec and Canada
In Quebec, property assessments are generally triennial and governed by the Property Assessment Act, with each municipality responsible for its own assessments. In other provinces, such as Ontario and British Columbia, assessment rolls may be annual or five-yearly, and are administered by provincial agencies. Assessment methods and frequency may therefore differ between provinces.
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What are the impacts on assessment notices?
Changes to the property assessment roll have a direct impact on property taxes. An increase in the value of a property can lead to an increase in property taxes, while a decrease in assessment can reduce them. However, the impact also depends on the tax rates set by the municipality.
Discover the 5 steps to request a review of your property assessment roll
1. Origin of the request and deadlines
Who can request a review? The request can come from the property owner, but also from anyone with a legitimate interest, such as tenants or creditors. Requests may concern the assessment value of a property or its classification (residential, commercial, etc.).
2. Application deadline
Requests must be submitted within the prescribed timeframe (generally 60 days following receipt of the tax notice). The review is carried out by the municipality. If necessary, a dispute can be brought before the Commission municipale du Québec.
3. Reasons for a request for review
A request to revise the property assessment roll may be made for a number of reasons, such as an error in the cadastral value, an inaccuracy in the property's characteristics (surface area, type of construction), a change of use not taken into account, incorrect application of rates or coefficients, or a disparity with similar properties in the same sector. These reasons may justify an adjustment if the valuation does not reflect the reality of the property.
4. Criteria for submitting a request
Within 60 days of receiving the assessment notice, you must submit a written request to the municipality and provide a valid reason (assessment error, incorrect information, inequality with similar properties, etc.). The request must include the address of the property and the justification for revision.
5. Sending a request by registered mail
It's a good idea to send the application by registered mail, so that you have proof that the application was sent and received. This can be crucial in the event of a dispute, or if the municipality does not recognize the submission date.
FAQ
How do I understand the valuation of my property?
To understand the municipal assessment of your home, check the cadastral value, the property information (area, type, etc.) and ensure that the assessment method used (comparative, by income, etc.) is appropriate. If errors or discrepancies with similar properties are found, you can request a review.
What are the advantages of property assessment?
Property assessment provides a fair basis for municipal taxation. It also ensures transparency in the application of taxes and enhances the value of the real estate market by providing accurate property estimates.
Can I dispute my most recent property assessment?
It is possible to contest a property valuation carried out during a real estate bubble if the value of your property seems artificially high. To do so, you must demonstrate that the appraisal no longer corresponds to the reality of the current market, for example by comparing it with recent sales or by calling in specialists. If your claim is rejected, legal recourse may be considered.
To find out how DuProprio can help you sell your property commission-free, call us at 1 866 387-7677. You can also view our short informative videos at a time and place that's convenient for you, to discover the support we offer for a worry-free real estate transaction.
