Is this time of the year again. (For most of us anyways)
We just got our first property tax notice for 2017 today. Given the continue run up in home prices, when the average homeowner Joe open their envelopes this time around they will again say to themselves “no eye see, how much is my property tax going to be this year?”.
For this particular townhouse in Greater Vancouver that we owned, the 2017 assessment value was up 21% year-over-year, from $491,000 to $596,000. All the people who don’t follow our blogs will be telling on their friends and dim sum buddies “oh man, our property taxes will likely be 21% higher than last year, no money me so poor”.
But for experienced real estate investors like us, we knew despite the 21% increase in assessment value in 2017, we were quite confident that our property tax for this particular property will be more or less the same as in 2016. Not to our surprise, we opened our envelop and found out our property taxes was 3% LESS than last year.
Now if you are wondering how is this possible? This is not what my friends / auntie / uncle / 24 hours newspaper / inexperience realtors have been telling you all these years. You need to read one of my previous blog:
For those lazy bumps, the short version is that, as most of you know, there is a disproportion of increase in prices of detach homes in Greater Vancouver between July 2015 to July 2016 (which is where the 2016 & 2017 assessment values came from) relative to townhouses and condos. And property taxes are based on your home price relative to your neighbours, not absolute value. Therefore despite the small overall increase in city’s budget for 2017, townhouses and condos owners are paying a disproportionally less than detach home owners.
If you understand this concept, you will forever be a minority that do as you will never be able to convince someone that this is how property taxes are calculated. They have been brainwashed by the media for as long as they have lived.
Hope you learn something today. Until next time!