Property values that appear on the assessment roll correspond to the property’s exchange value on the free and open market. It is the most probable selling price paid by a potential buyer in a private sale.
Factors that influence the value of your property
To determine the market value of a property, the city appraiser takes into account real estate market conditions for the 18-month period prior to the coming into force of the assessment roll. For the 2020-2021-2222 rolls, this date is July 1, 2018.
The main factors that determine value are:
- lot area
- size of the building(s)
- age of the property, adjusted to account for any renovations or major additions
- quality of the construction
- income generated by the property, if applicable
Changes made to the property
The Act respecting municipal taxation stipulates that the property assessment roll must be updated to reflect changes made to property (such as change of ownership, new construction and renovations).
Updates to the roll are retroactive to the date on which changes to the property were made or the end date of construction/renovations, without extending past the fiscal year preceding the current year.
Some renovations can increase your property value:
- kitchen or bathroom renovations
- addition to a building
- finishing a basement
Regular maintenance work such as replacing the roof, painting and adding new floors will probably have no effect on your property value.
If your property is subject to changes on the assessment roll, you will receive a notice of alteration from the city informing you of the changes and the grounds for the update.
Value of the lot, property and building The assessment roll looks at three elements, established on the basis of real estate market data (mainly for residential buildings with five dwellings or fewer):
- Lot value is assessed on the basis of the selling price for comparable vacant lots.
- Property value is assessed on the basis of the selling price for property with similar features.
- Building value corresponds to the value of the immovable, minus the lot value.
Distinctions exist for non-residential buildings.
The property value, which represents the sum value of the lot and the building, is used to calculate the municipal and school taxes.
Methods of assessment
To determine the actual value of property on the assessment roll, the appraiser analyzes the real estate market as it was 18 months prior to the coming into force of the assessment roll and uses any of the following assessment methods:
- Cost method: Consists of subtracting the depreciation from the replacement cost new for the building, then adding the property’s land value.
- Comparison method: Consists of determining the most probable selling price of the property by comparing it to other similar property sold in the same neighbourhood.
- Income method: Consists of estimating the property value based on the current net income it can generate at a rate based on similar types of property that have been sold.
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