1) What is the assessment system in place in Saskatoon?
At present, the City of Saskatoon's assessment system is an "Ad Valorem" tax system. Ad Valorem, simply stated, means that taxes levied are distributed among all taxpayers according to the value of each taxpayer's property.
2) Is this a common system?
Most jurisdictions that levy a property tax across Canada, North America and around the world use the same basic assessment and property taxation system as is used in Saskatchewan. While some jurisdictions use more sophisticated techniques or approaches in determining the assessed values, the goal is the same - to place a value on a property that is then used to levy property taxes.
3) What is a reassessment?
A reassessment is the updating of all property assessment fair values to reflect more current values.
4) Why is reassessment necessary?
Provincial legislation requires all properties in Saskatchewan be reassessed every four years. The Saskatchewan Assessment Management Agency (SAMA) is responsible for assessment policy in the province. Each municipality is generally responsible for setting its own tax policy.
Reassessment keeps values more current and takes into account the various economic and value changes that occur. While Saskatchewan reassesses every four years, many provinces in Canada have moved to a reassessment every one or two years.
For the 2009 reassessment, the entire province of Saskatchewan will be moving to a results base mass appraisal system for most properties. Saskatchewan is the last province in Canada to implement a market value system.
5) Will the major changes in property values which took place in 2007 affect my 2009 reassessment?
For the 2009 reassessment, all assessors are legislated to use a June 30, 2006 base date to place a value on properties. Therefore, the strong upward trend in values in Saskatoon at the end of 2006 and throughout 2007 will not affect the assessed values for 2009.
6) Are changes being made to how properties are being assessed in 2009?
Assessment reform taking place in this province was done in a stepped approach. Residential and condominium changes took place in Saskatoon as well as some of the other major cities for the 2005 reassessment.
The major change for commercial, industrial and investment properties will take place for the reassessment in 2009. The Income Approach (Rental Income) to value will be allowed on these property types. The income approach normally capitalizes the net rental income of a property to arrive at a value, although there are other methodologies which can be used. It is important to remember that even with this approach, mass appraisal techniques must be utilized.
With the 2009 reassessment, Saskatchewan will have what is known as an ends based or results based mass appraisal market value assessment system. This type of system looks at the final values as an indicator to determine if the assessment office has correctly done its work. The previous systems which were used in Saskatchewan were known as process based systems. In these systems, it was the process used by the assessment office to get to the final values which were looked at to determine if the work was done properly. The final result was simply a product of the process. Most other assessment jurisdictions review the result - not the process. It is a more fair and transparent system which is much easier for property owners to understand.
7) What is a Mass Appraisal Market Value Assessment?
Market value assessments are determined through a variety of approaches for what a property might have sold for as of the base date of the reassessment. For 2009, the base date is June 30, 2006. These values must also be completed using mass appraisal, which means the values must be statistically reliable. In addition, they represent an approximate value – not an absolute value - as the main focus of the assessment process.
Property values should be fair and equitable when comparing similar properties. An example is shown below:
Two identical houses might sell for a different amount for a variety of reasons (such as the negotiation skills of the purchaser or seller or how quickly the seller wishes to dispose of their property). The assessments for these nearly identical houses should be similar, even though they may actually have sold for different amounts. This is what is meant by fair and equitable and the mass appraisal system helps meet this test.
8) What factors influence my market value assessment and why would my property's market value change?
There are many factors assessment appraisers consider in determining the market value assessment of a property. For example, the size and location of the lot, the size, style, quality, condition and age of the home, what amenities are on the property (such as garages, pools, basement finish, air conditioning, etc) and any other items which may affect the value of the property in the marketplace. Any improvements to your property that increase its value, such as building an addition to your home, will be looked at and may change your assessed value.
In a year for which a reassessment is done, your market value would also change because the year of valuation is being updated to a more current level. For example, in 2009 (a reassessment year) your market value would change even if your property physically did not change due to the fact your property's value is being updated from an estimate of value based in 2002 to an estimate of value based in 2006.
9) Where do assessment appraisers get the information to calculate the fair value of my property?
Assessment appraisers review information about your property obtained from recorded property characteristics, building permits, site visits, land title information, and sales data. Using this information, they calculate your market value assessment using a variety of appraisal techniques similar to what a realtor or bank appraiser would do. It must be remembered, however, that assessors must use mass appraisal and that all values must be fair and equitable with similar properties.
10) Why might my property have sold for something different than its fair value assessment?
Your market value assessment is influenced by the average sale of similar properties and is not based on one individual sale. Similar properties often sell for different prices for a variety of reasons including buyer preference, negotiating skills of the buyer or seller, how quickly the seller wishes to rid themselves of the property as well as differences in landscaping.
Assessment appraisers cannot reflect such variances as negotiating skills in their assessed values as doing so would, in the end, result in different property taxes for what are effectively the same or very similar properties. In addition, the market value assessment is set at a specific point in time for all properties. This point in time is most likely different than the time in which your specific property may have sold. Assessment appraisers must value all properties in a jurisdiction within each reassessment cycle and as such, use what is referred to as mass appraisal.
11) What is the difference between mass appraisal and single property appraisal and why do assessors use mass appraisal?
Mass appraisal is the systematic appraisal of groups of properties as of a given date using standardized procedures and statistical testing. Single property appraisal, on the other hand, is simply the valuation of one property as of a given date. Single property appraisal is not a financially feasible option for many assessment jurisdictions. Assessment appraisers in a jurisdiction must re-value all properties on a regular basis and as such use mass appraisal techniques to do this. Saskatchewan legislation specifically states that properties are to be assessed fairly and equitably and in the same manner using mass appraisal techniques.
12) What is the difference between market value and market price?
Market value is the most probable sale price of a property at a given point in time. Market price of a property is the price a particular buyer and seller agree to in a particular transaction. The market value of a property may vary from the actual market price for a variety of reasons. Such things as personal preferences, negotiating skills, particular wants and desires of both the seller and the buyer may alter the actual market price of a property. In some cases this variance may be substantial and it is for these reasons assessment appraisers must look at the most probable price when determining the worth of a group of properties.
13) When a reassessment takes place, will my property taxes change?
Almost all properties will see a tax change in a reassessment year. However, this does not mean that your property taxes will increase. Some property taxes will increase and others will decrease. While most property assessments will increase, your tax change will depend on whether your assessment increased above or below the average assessment change compared to other properties in the city and, on what tax policies are adopted by City Council.
An example of what took place in the 2005 reassessment for residential properties is shown below:
In 2005, fair values were adjusted to 2002 values. The previous reassessment in 2001 represented 1998 values. Residential properties increased on average 13% between the 2001 reassessment and the 2005 reassessment. Properties that increased in value less than 13% had a decrease in property tax and properties that increased in value more than 13% had an increase in property taxes.
Example # 1:
2001 Fair Value - $197,300
2005 Fair Value - $218,800
= 10.90% increase in fair value
Taxes decreased by $ 101.32 (before changes to the mill rate for operational requirements).
Example # 2:
2001 Fair Value - $76,900
2005 Fair Value - $97,700
= 27.05% increase in fair value
Taxes increased by $ 257.80 (before changes to the mill rate for operational requirements).
Bottom line – properties that have above average increases in value may have an increase in property tax and those with lower than average increases in value may have a decrease in property tax as a result of reassessment.
14) Will the City collect more taxes due to a reassessment?
Reassessment is designed to collect the same amount of total taxes as the previous year, with the difference being an updated assessment level. While some property owners will pay more taxes than before, others will pay less. Overall, reassessment is revenue neutral.
15) Where do my tax dollars go?
Each year, City Council sets the municipal mill rate for the upcoming year. However, City Council is also responsible to include, as part of the annual tax notice, the mill rate requirements for the School Boards and the Library. Historically, the total taxes collected have been distributed as follows:
In this example, for every $1000 collected in property taxes, the City received $390, the School Boards $560 and the Libraries $50. This amount may vary slightly year to year but has remained fairly constant in the last number of years.
16) If I am not satisfied with my assessment, what can I do?
If you are still not satisfied with your assessment after you receive your official assessment notice (approximately end of January 2009), the first step you should take is to either contact the Assessor's Office by phone (975-3227) or go to the Assessor's Office located in City Hall. Ask to speak with an assessment appraiser in respect to your property (either residential or commercial). They will explain how your assessment was arrived at and what items in your property were assessed. At that time the assessment appraiser can once again confirm the accuracy of the records and explain the steps that need to be taken should changes be required. The assessment appraiser may also be able to provide you with other information that may assist you with your issues.
17) If I am still not satisfied after speaking with an assessor, what is my next step?
If you are still unsatisfied with your assessment at that stage, you can appeal your assessment to the Board of Revision whose office is located in City Hall. It is important to note that appeals against an assessed value are only accepted for a limited time period as allowed by Provincial Legislation following completion of the assessment roll.
In a reassessment year, the appeal period is 60 days after the mailing of the notice. For example, if the official 2009 assessment notices were mailed January 29, 2009, the appeal period would be closed by March 29, 2009. After that time period, appeals would not be accepted. The last date of appeal is stated on your official assessment notice. In a non-reassessment year, the appeal date reverts to 30 days
It is important to remember that only your assessment can be appealed, not your property taxes. The Board of Revision ensures your assessment is fair and equitable. If you appeal your assessment and the Board makes a change, the decision changes the properties value in the year of assessment and is not made retroactive to previous years.