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Are you Paying too Much in Property Tax?

27/08/2019


Many people in B.C. receive their property tax assessment and simply accept it, even though they may feel that it is too high. Here’s the issue: the B.C. Assessment Authority assesses over two million properties annually. With this volume of properties, an individual analysis of each property is not possible. Instead, B.C. Assessment applies mass appraisal techniques to value all properties in the province and that can lead to over-valuing and higher-than-necessary taxes.

Luckily there’s something you can do even before receiving your assessment notice. It’s called a pre-roll consultation.

A pre-roll consultation allows a property owner or agent to have input in the upcoming property values while the assessment is still in ‘draft’ form. Property owners and or their agents receive drafts of the assessed value before the release of the assessment roll in January. This allows you to start a review process early and have your assessment adjusted before the value is finalized.

Pre-roll consultation allows you to correct market and site-specific issues before the 2020 assessment is finalized and mailed out in the first week of January.

How it works

In September, the B.C. Assessment Authority will begin accepting requests for draft assessments for the 2020 assessment year. The deadline for requests is October 4, 2019. The draft assessments are typically delivered in early November, allowing time for review before they are finalized in December.

For commercial properties, B.C. Assessment will only be providing draft assessments for properties that have met the minimum information disclosure requirements. This includes current years rent roll and previous three years financials. It is important to have this information reviewed by a property tax specialist prior to the October 4, 2019 submission deadline.

MNP’s property tax specialist will review the draft assessment to make sure you are paying your fair share of taxes. If the assessment seems to be inaccurate, we will work with B.C. Assessment to resolve any issues, providing them with our market evidence and property-specific information so they have an accurate picture.

Issues resolved during pre-roll will result in tax savings before you receive your tax bill.

Why should you participate in pre-roll?

Pre-roll consultation provides added certainty for next year’s assessments, allowing property owners, managers, and tenants to better budget for 2020 tax liabilities. Identifying and resolving issues during pre-roll also typically means that an appeal is not necessary. Tax savings are immediate and are reflected on the property tax bill.

Appeals typically take a long time to resolve, often running past the tax bill due date. This results in property owners paying the full property tax amount and receiving a credit upon conclusion of the appeal.

Example

A person who owned and managed an office building had never had an assessment reviewed or appealed. MNP was engaged to review an assessment during pre-roll. The review indicated that B.C. Assessment was applying market rents that were significantly higher than those the subject property was able to achieve.

The subject property lacked many of the amenities of the B.C. Assessment comparable properties. This property had insufficient parking, no elevators, and poor access to transit. As a result, there was an over-assessment of approximately $3,000,000, equating to approximately $30,000 in additional taxes.

MNP was able to give B.C. Assessment property-specific data of as well as our own market evidence to negotiate a lower assessed value. These changes were made prior to the assessment being released and resulted in approximately $30,000 in tax savings for the property owner.

The bottom line

Don’t just accept your property assessment, especially if you feel like it’s too high. A pre-roll consultation can identify assessment issues early so you don’t have to pay more tax than necessary and gives you accurate information to plan for the future.

Inder Nijjar is a Manager in MNP’s Property Tax Services practice and can be reached at 778.729.0533 or [email protected]

How can MNP represent you in pre-roll?

To represent your properties MNP will require the following information.

  • 2019 BC Assessment Notice
  • 2019 Rent roll (commercial properties)
  • Previous three years income and expense information (commercial properties)

At the conclusion of the Pre-Roll Consultation period, MNP will provide you a summary of results and any recommendations of further appeal.

MNP will also be providing 2020 tax budgets as preliminary assessment values become available.