The price of single family homes in Nelson has increased by an average of 28 per cent to a typical value of $646,000, according to BC Assessment’s annual report.
That’s the highest housing value of all communities in the West Kootenay-Boundary, in which the increase in assessed value of residences over the previous year is between 20 and 30 per cent. Across the province the average increase is 22 per cent.
The assessed values are based on the amount a house would probably have sold for on July 1, 2021, given the market conditions at the time.
A typical condo or townhouse in Nelson is now assessed at $513,000, up 23 per cent from the previous year.
“Your property assessment should reflect what you could have sold your property for last summer, had you wanted to, within a reasonable range,” says Sharlynn Hill, deputy assessor for Kootenay Columbia.
Hill added that the assessed value is not an indication of what it might sell for today, nor is it an indication of how much your municipal taxes will be.
BC Assessment is a provincial Crown corporation that classifies and values all real property in British Columbia.
Percentage increases in values in the West Kootenay Boundary area, from highest to lowest, are: Greenwood (53), Slocan (51), Warfield (34), Grand Forks (33), Rossland (33), Trail (32), Kaslo (31), Montrose (30), Midway (29), Nelson (28), Creston (27), Fruitvale (27), Nakusp (25), New Denver (23), Castlegar (21), Salmo (19) and Silverton (15).
Hill thinks the increases can be attributed to a number of factors.
“Looking at the real estate market across the province,” she says, “we’ve seen record low housing supply, low interest rates, and an ongoing robust demand.”
And the mobility of the population has increased, she says, often to smaller communities in rural areas that are seen as desirable.
Chuck Bennett, past president of the Kootenay Realtor’s Association, says realtors knew BC Assessment would report a 20-to-30 per cent increase at July 1, 2021, because that’s what sales data from last year told them.
But he says the assessed value is of limited use to realtors.
“We don’t use BC Assessment to value houses,” he says. “We look at recent comparison sales, similar houses in similar areas, interest rates, lenders’ stress tests.”
But now that the new assessment numbers are out, he says, buyers and sellers will be asking realtors about assessed value.
“And that will cloud the conversations about true value and what things are going to sell for over the next year,” Bennett says. “Because no one really knows.”
Hill said a common misunderstanding is that an increase in assessed value will mean a commensurate property tax increase.
“The most important factor is not how much your assessed value has changed, but how your assessed value has changed relative to the average change for your property class in your municipality,” she says.
If your property’s value change is lower than the average for the municipality in your property category, your taxes will probably decrease. If it is roughly the same, you taxes are likely to stay approximately the same. If it is higher than the average, your taxes are likely to go up.
Nelson’s chief financial officer Colin McClure says the city decides what formula it would have to apply to the assessed value in order to get the amount of overall taxes it collected last year. Then, to come up with a tax increase, the city adds any inflationary or other increases it wants in the coming year.
McClure also points out that city taxes comprise only half of Nelson residents’ tax bills. The total on the tax notice includes tax levies from the Regional District of Central Kootenay as well as school and hospital taxes, over which the city has no control.
The BC Assessment website lists the addresses and value of the top-valued residences in Kootenay-Columbia. In the top-20 properties, all but two are in the East Kootenay.
Fifth on the list is a rural property near Grand Forks valued at $5,657,000. The Blaylock Mansion property at Four Mile near Nelson is 18th, valued at $4,338,000.
In the top-100 properties, only 16 are in the West Kootenay-Boundary area and the rest are located in the East Kootenay.
The BC Assessment website (bcassessment.ca) has a search tool in which the assessed value of any property in B.C. can be discovered by entering the civic address.