When property values go up, it’s typically considered to be a good thing; a sign that the economy is doing well and as a result the market value of the property has increased. But when property values double — or pretty close to it – it raises more than a few eyebrows, and not in a good way.
That’s what light-industry business owners in Prince Rupert now have to deal with. Last month, the crown corporation in charge of assessing property values in the province, BC Assessment, sent out letters informing many land owners that their properties are now estimated to be close to twice what they were last year.
One land owner provided a copy of their letter from BC Assessment which says that assessed value of their property will be going up from $106,500 in 2011 to $250,600 in 2012 and another business said that theirs went from $244,000 to $455,000. And they are not the only ones, The Prince Rupert Northern View called several different light-industry businesses in Kaien Industrial Park just outside Prince Rupert and all of them reported an increase in their property values, sometimes 70 per cent or more.
Like other municipalities, the City of Prince Rupert determines how much tax people will pay based on the property values that BC Assessment determines, so such a big jump in property values means that land owners will have to pay several thousand dollars more than last year. This may be a good thing for a cash-strapped city about to begin its budgeting process, but its not so great for business owners who feel that their assessments don’t reflect the economic realities in Prince Rupert.
“I phoned up the assessment board asked them how they can justify increasing out land values? I asked them if they’ve walked down Second or Third Avenue lately, every second store is closed. We live in a depressed town at a depressed time,” says Chrystal Hillier of Wainwright Marine Services.
“It is very frustrating to try to operate a company in this town with the increased costs. Nobody has had a stellar year in the past couple years around here, we’re lucky to be keeping our heads above water.”
Hillier says that BC Assessment explained that her values had been increased because of the sale of a piece of property on Kaien Road in the industrial park was sold twice last year, once for 180,000 and again in August for 282,000. She wonders if anyone from BC Assessment has actually been to the industrial park assess the property there or if the assessors are just deciding this based on numbers in their office in Prince George.
Sales data is an important tool in trying to estimate the value of the property, but it isn’t the only one according to Christopher Whype, deputy assessor for BC Assessment in Prince George.
Whype says that that in the past year there have only been three sales in the Kaien since 2008, and he admits that’s not an ideal sample size, but they believe the trending up of the prices in the area warrants a 65 per cent minimum increase in the property values in the park.
“Yes there has only been one sale . . . yes one sale doesn’t make the market, but if we have consistent trending year-over-year it’s telling us that we are indeed undervaluing most properties, we have to take that into account as we’re mandated to get to market value,” says Whype.
Whype says that the average value for industrial properties has been on the rise across the region, not just in Prince Rupert.
Property owners have put forward the concern that because BC Assessment does not have an office in Prince Rupert all the assessment is done at a distance without anyone actually coming to see the properties or the community for themselves. Whype says that they still do come to communities to assess properties in person. He says that last year they had people in the industrial park to inspect and revalue warehouse and service garage properties there.
Everybody’s assessment is different and Whype couldn’t discuss any specific cases. But he says that not only do they place a value the land but on the improvements that have been made to it and ones the neighbours have made to theirs.
“We may find things are just not reflecting physically in our inventory database. That can mean the value going up, down or staying the same . . . obviously, if we see one property stay the same but his neighbours put an extra 10,000 ft onto their warehouse we’re going to have to take that into account,” says Whype.
Even if the properties were as undervalued as Whype says, seeing a 100 per cent jump in their property values in a single year came to a shock to many land owners and businesses not to mention the unexpected expense in taxes that comes along with it.
Whype says he realizes that, but they didn’t just rush into the decision to raise the values, when they see sales forcing values higher they make sure it wasn’t just a one-off event.
“We try to get as much information as we can. In this case we now have a three year trend and we can now make a solid decision that we are definitely undervaluing these properties. In this case, the market evidence we have now is the best evidence to go by,” says Whype.
If the property owners feel that the estimate doesn’t reflect the true market value of their property, he encourages them to appeal and have their assessment reviewed by the Property Assessment Review Panel where they’ll be able to make their case. If you want to appeal, you need to let BC Assessment know by January 31 or it will be too late. Simply calling them will do, or see www.bcassessment.ca for more information.
Back at Wainwright, Hillier says she’s already decided to appeal and has already met with eight other businesses likely to do the same.