Here’s what the latest property assessments could mean for you

Assessed property values are in, and just like years past, values have risen across Vancouver Island—from $342 billion in 2022 to almost $386 billion this year.

But the 2023 assessments come with a caveat. Collected July 1, 2022, the numbers don’t account for trends from the last six months, which include rising interest rates and a decreasing number of property sales.

“When similar properties were sold up to and around July 1, those market values are used to calculate the property assessment values,” said Jodie MacLennan, a deputy assessor with BC Assessment. “As a result, 2023 property assessments are likely higher than what the current market value may be.”

It makes for an unusual year, said real estate analyst Leo Spaltehoz, because most years, property values have risen in the six months following the assessment.

“Normally by the time those assessments come out, you can probably sell your house for more than the assessed value,” he said. “This time, that's quite unlikely.”

But the higher interest rates and slowing of property sales—bringing prices down roughly 10% since July—are related, Spaltehoz said. “Interest rates definitely caused the latter.”

“We were getting to the point where the market was very likely going to cool down on its own anyways, just because we've had such huge increases in prices that it was getting towards the limit of what people could afford,” he said. “And then interest rates went up. And what we basically saw was, prices went down to basically exactly offset the increase in interest rates.”

At the market’s peak in early 2022, a mortgage might cost about $5,000 per month after a 20% down payment, he explained. Prices dropped, but the average house will still cost about $5,000 per month thanks to the spike in interest rates.

“That's the tricky part for many people is that monthly payment has not gotten any less, despite those prices going down,” he said. “So they would have to be able to actually swing that payment. And of course, the prices of everything else have gone up. So that hasn’t made it any easier to afford that payment.”

For current homeowners, a jump in a home’s value often comes with concerns about increases to property taxes.

A higher assessment is not an automatic property tax hike, Spaltehoz emphasizes. The most important factor is not your new assessed value, but how your assessed value has changed relative to the average change for your property class in your municipality or jurisdiction.

For example in Victoria, the average increase for a single-family home is up 8%. In Colwood, for example, it’s up 16%. Your property taxes are likely to increase only if your property’s assessed value has increased by a percentage higher than that of your community.

Renters can be hit too

If a landlord does see increased property taxes, there’s a chance that burden will be downloaded to tenants, said Virginia Holden, executive director of the Greater Victoria Housing Society.

“The reality is, especially in the secondary market, where you could get landlords who own homes and have secondary suites or they're renting out their condos. If their costs go up, then the possibility of rents going up on turnover are likely,” she said. “Especially in this highly inflationary market, where everything from insurance and hydro are more expensive.”

With rent increases capped at 2% in BC, it’s new renters who would see the rising rents, she added. But that’s only if property taxes rise.

“Property assessments, they don't necessarily correspond to property tax changes,” she said. “They really just provide some information to municipalities to make some of those assessments around property taxes.”

2023’s top-valued properties

Yet again, James Island is the highest valued residential property on or near Vancouver Island, and the third most valuable in the province. The 2023 assessment reveals another leap in value for the Gulf Island property up to $61.2 million—a jump from last year’s $54.7 million assessed value. Both its buildings and its 300+ hectares of land (about four times the size of Beacon Hill Park) have risen in value by 12%, despite a provincial approving officer rejecting a subdivision application from the land’s billionaire owner Craig McCaw of Seattle.

McCaw wanted to have his development company J.I. Properties build 76 residential lots and three commercial lots on the property, but the officer determined last year that the development plan wasn’t in the public’s interest. The province cited a risk to wildlife and the interests of the Tsawout First Nation including access, cultural practices, and archaeology.

Other properties in the Island’s top 10 list were holdovers from 2022, including 3160 Humbler Rd., a single-family waterfront home in Oak Bay that actually dropped in value from $17.8 million to $16.8 million.

The top 10 highest valued Island properties in are:

1. James Island: $61.2 million (Gulf Islands, Inner Islands Acreage)
2. 1365 Dorcas Point Rd: $27 million (Nanoose Bay, beachcomber acreage)
3. Samuel Island: $20.7 million (Gulf Islands, acreage)
4. Domville Island: $17 million (Gulf Islands, acreage)
5. 3160 Humbler Rd.: $16.8 million (Oak Bay, waterfront single-family home)
6. 1850 Lands End Rd.: $15.4 million (North Saanich, waterfront acreage)
7. Forrest Island: $15.3 million (Gulf Islands, acreage)
8. 1374 Dorcas Point Rd.: $13.6 million (Nanoose Bay, beachcomber acreage)
9. 466 Scott Point Dr.: $13.2 million (Salt Spring Island, waterfront cottage)
10. 963 Beach Dr.: $13 million: (Oak Bay, waterfront single-family home)

—With files from Cam Welch