BC assessment on property for sale

Assuming you’re referring to the municipal assessment, it has no bearing in anything but how much tax you pay. Changing it won’t help them get a mortgage on the property.

C

No, I'm referring to the BC assessment which affects how much property taxes you pay every year. They won't be getting a mortgage because they have cash but would rather not pay double the tax when the property isn't worth the assessed value.

rtmrrtmr wrote: ↑ No, I'm referring to the BC assessment which affects how much property taxes you pay every year. They won't be getting a mortgage because they have cash but would rather not pay double the tax when the property isn't worth the assessed value.

Gotcha. I was confused because you mentioned the difficulty getting a mortgage.

As far as appealing an assessment, they’re 6 months late, and many offices are shut down still. They can try to go through the appeal process, but their odds aren’t good for this year. Probably more realistic to focus on getting it done in plenty of time for next year.

C

rtmrrtmr wrote: ↑ I am helping a family member who is looking to purchase an investment property and found one on the market that needs a complete reno. The asking price is about half the assessed value and it's so decrepit that the banks won't mortgage it. I was looking into appealing the assessment but it looks like the deadline was January 31. I guess I'm wondering if anyone has any experience with appealing an assessment past the deadline?

Low sale price is never an issue to a lender. It’s not an issue of BC assessment not lining up with the appraisal/ sale price.
Lender normally do not advance a loan if:
1. There is no running water
2. There is no occupancy permit
3. There is a history of grow-op
Etc.
So it’s not about the low sale price. It’s something in the evaluation process that spooks the lender and makes them believe that the property is not suitable for occupancy. You will never get a conventional mortgage if the property is not suitable for occupancy in the condition you get it upon purchase.

Get to the bottom of it. If the reason is that the property is uninhabitable then your only choice is to look for an unconventional mortgage at a higher rate.

rtmrrtmr wrote: ↑ No, I'm referring to the BC assessment which affects how much property taxes you pay every year. They won't be getting a mortgage because they have cash but would rather not pay double the tax when the property isn't worth the assessed value.

I don't have experience with making a late appeal, but looked into the appeal process at one point. My parents received some mail in early 2020 for appealing one of their properties but they didn't bother because the procedure made it seem like an uphill battle. I think we were to gather evidence and proof about why we feel it should be a lower amount and then book an appointment to present to them.

What I've been noticing is that BC assessment tends to inflate the land value and allocates very little value to the actually building/structure. Basically, old house = close to being worthless. Therefore, unless if what you are buying is new enough for the building to be worth something (i.e. a significant portion of the total value), appealing for a reduction in property taxes due to the poor condition of the building will likely not make a huge difference in your property tax amount.

For example, an assessment of an old house in East Vancouver may look like this: $1,000,000 total. Land value: $950,000. Building value: $50,000. Even if I can prove that the house is completely destroyed inside and is worth $0, BC assessment will still tax me on the $950,000 land value.

You will need to wait until your family member actually buys the home and receives the new assessment. You have missed the deadline for this year and you cannot go back retroactively as you cannot appeal an assessment for a property that you did not own.

At this late time now there is little cost to waiting. B.C. Assessments are based on property values as of July 1st so once you buy the property, the assessment will be from July 1, 2020. Have your documents and full appraisal ready if you plan to appeal. But, if your family member is planning to renovate the property, they may be better off financially leaving the next assessment as is.

Why is the property so cheap compared to assessment. Usually it's closer to the buying price.

Yes, the house is uninhabitable. I guess I should have said it needs to be gutted instead of reno'd. The property is not in Vancouver so the house value is actually more than the land. I was trying to see if they could get the property taxes reduced for the first year since they will be spending a lot on the reno. But it sounds like no. Thanks for your advice everyone.