Your #1 Source of Montreal Real Estate News

Municipal Assessment vs Home Evaluations – They’re not the same thing!

0 2,056
Estimated reading time: 1 minute, 54 seconds.

When selling a home, looking at both municipal assessments and home appraisals are a good idea. But municipal assessments do not necessarily determine the appraisal value, and should never be taken at face value when determining an asking price.

Municipal assessments are governed by the Municipal Taxation act, and are based on the general structure and architecture of the building, the condition of the home, the square footage, number of rooms, floor height, and amenities. They are conducted every three years in Montreal, in compliance with the Loi sur la fiscalité municipale and municipal taxation. A home that was assessed more than a year ago may have fluctuated a great deal in market value, and may no longer correspond to its municipal value. Another factor to consider is that, especially in the condo market, mass appraisals are carried out using statistical tools are used to determine the value of a home. According to municipalities, one evaluator may be responsible for 25,000 or 30,000 municipal assessments, and therefore will not able to visit each property individually.

Market value, on the other hand, is the projected price that a house will sell for within a projected period of time that is considered reasonable. Market value is calculated by doing a comparative market analysis (a CMA), which is based on market conditions and current averages and on the typical buyer demographic for a property in that area. It looks at other properties sold in the past year, on the same street or in the same building, to determine the market standards in the area. It also makes adjustments for intangible characteristics of the property- such as the view, architectural distinctions, reputation of the building, uniqueness on the market, and so forth.

There is often a great deal of confusion between assessed municipal value and market value; and it is not uncommon for buyers to try using municipal value to negotiate on price. In reality though, a property’s assessed value is seldom the same as its market value, since the tax assessors that are required to determine municipal values are not required to adjust the assessed value to align with the current market value.


Want to stay informed on the latest real estate news?

Subscribe to get the latest news delivered straight to your inbox every week

Leave A Reply

Your email address will not be published.