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  • Laura Kemp, P. App., CRA

Should You Appeal Your Property Assessment?

Recently, many property owners in Manitoba received their new Property Assessment Notices for 2025. According to the Municipal Assessment Act, properties must be reassessed every two years, with the last assessment occurring in 2023. The assessed value used for these assessments is based on the property's value as of April 1st, two years prior. Consequently, the 2025 reassessment reflects property values as of April 1, 2023, while the 2023 assessment was based on values as of April 1, 2021.


Understanding Market Value

"Market value" is defined as the most probable selling price of a property in a transaction between a willing seller and a willing buyer.


Many homeowners have recently reported significant increases in their property’s assessed values for 2025 compared to 2023.


As a professional real estate appraiser at Kemp Appraisal, I also received a considerably higher assessment notice for my lake house, which was surprising even to me.


Why This Increase Can Be Concerning

As a homeowner in Manitoba, receiving your property tax assessment notice can be an eye-opening experience. While these assessments play a crucial role in determining your annual property tax bill, they are not always accurate. If you believe your property has been overvalued, appealing your property tax assessment is a viable option.


Assessing the Reasonableness of Your Assessment

Ask yourself whether the assessed value is reasonable based on what your property could have sold for on April 1, 2023? If the answer is yes, then your assessment is likely accurate. If the answer is no, consider how far off the assessment is. Generally, I advise homeowners not to go to the length of a formal appeal unless the assessment is off by at least $60,000.


The Cost of Appealing Your Assessment

A professional certified cottage appraisal costs at minimum $500. To justify a formal appeal, you should aim to save at least this amount in taxes, that is, if your assessment is successfully lowered. If you're interested in formally appealing your assessment, contact me at 204-791-1746 or laura@kempappraisal.ca to schedule a property appraisal. My appraisals for property assessment appeals are completed retrospective to the market value as of April 1, 2023.


Trends in Property Values in the Eastern Beaches

When conducting appraisals in the Eastern Beaches of Lake Winnipeg, I have noticed that sales prices have often exceeded assessed values in recent years. Similarly, estate and family property accounting appraisals have shown higher market values than assessed values, raising questions about the accuracy of previous assessments.


Instead of focusing on the difference in your property’s assessed value over the previous one, consider only whether the new assessed value is reasonable for what your property could have sold for on April 1, 2023?


Below is a chart showing figures from MLS data for this area. It highlights the significant increase in both the number of sales and the average sales price of properties in 2021 and 2022.

Observations:

  • 2017-2019: Steady sales with slight decreases in average prices.

  • 2020: Significant increase in sales volume and average prices as COVID began.

  • 2021: Peak in sales and average prices due to COVID and low interest rates.

  • 2022-2023: Fluctuations in sales and prices due to the start of high-interest rates.


Changes Coming to the Education Tax Rebates for 2025!

The Province of Manitoba has recently announced significant changes to the Education Tax Rebates for 2025. While the 50% provincial property tax rebate and the $350 education tax credit will remain in place for 2024, homeowners will receive the credit directly at the source rather than through a rebate cheque in the mail. Starting in 2025, the existing tax credit will be replaced with a new credit of up to $1,500. If this $1,500 credit exceeds your gross school taxes, you will no longer have to pay school taxes at all.

For some homeowners, this change will result in a similar benefit as the previous rebate system. However, properties assessed at less than $500,000 may receive a more substantial credit than before, while those assessed at over $500,000 may see a reduction in their credit. Some estimates suggest that the critical assessment value is around $440,000. It's important to note that these calculations are based on last year's tax rates, and the 2025 education mill rates are yet to be determined.


Additionally, the new 2025 credit will only apply to a person's primary residence.


This means that cottage owners, as well as rental and commercial property owners, will not benefit from the new credit on their secondary properties.


Assessed Values: More Than Just Numbers

Assessed values for taxation purposes are determined based on several factors, including lot size, house size, style, basement finishing, garages, and location. These assessments assume all homes in a neighborhood are of equal condition based on age alone, which is often inaccurate. Homes in fair condition for their neighborhood may be overvalued, while substantially renovated homes may be undervalued.


Understanding the Gap: Why Property Tax Assessments Often Fall Short of Market Value

When you receive your property tax assessment notice, you might be surprised to find that the assessed value of your home is higher or lower than what you believe it could sell for on the open market. This discrepancy is more common than you might think, and it stems from several key factors inherent in the property tax assessment process. 


Conservative Valuation Approach

Property assessors often take a conservative approach when valuing homes for tax purposes. Their primary goal is to ensure that property taxes are fair and uniform across the board, rather than precisely matching market values. This cautious stance helps minimize disputes and appeals from homeowners, but it can also lead to assessments that don't fully reflect a property's true market potential. This does not seem to be what the new 2025 re-assessment approach is in some Rural Municipalities.


Mass Appraisal Techniques

Assessors typically use mass appraisal techniques to value properties. This method involves evaluating groups of properties at once using standard formulas and data sets, rather than conducting individual assessments for each home. While this approach is efficient and ensures consistency, it may not account for unique features, upgrades, or improvements specific to your property. As a result, the assessed value may be higher or lower than what a potential buyer would be willing to pay.


Time Lag in Assessment Data

Property tax assessments are often based on data that is a year or two old. This retrospective approach means that the assessment reflects past market conditions rather than current trends. In a rapidly increasing market, this time lag can create a significant gap between the assessed value and the actual market value. Conversely, in a declining market, assessments might temporarily overshoot current values.


Market Value vs. Assessed Value

It's important to understand the distinction between market value and assessed value. Market value is the price a willing buyer will pay for your home in the open market, considering its unique attributes and current market conditions. Assessed value, on the other hand, is a value determined by the local taxing authority for the purpose of calculating property taxes. This value is designed to be fair and equitable within the context of the broader community, rather than a precise reflection of individual market transactions.


Reasons to Consider an Appeal

There are several reasons why you might consider appealing your property tax assessment:

  1. Overvaluation: If you believe your property’s assessed value is higher than its actual market value, an appeal could result in a lower tax bill.

  2. Inaccurate Property Details: Errors in property details, such as incorrect measurements or outdated information, can lead to incorrect assessments.

  3. Comparable Properties: If similar properties in your area are assessed at lower values, it may indicate that your assessment is too high.


Steps to Appeal Your Property Tax Assessment

1. Review Your Assessment Notice

Carefully review your property assessment notice to understand the assessed value and the details used in the assessment. Check for any inaccuracies in property details.


2. Gather Evidence

Collect evidence to support your claim that the assessment is incorrect. This can include:

  • Recent sales data of comparable properties in your area

  • A professional appraisal report from a designated appraiser

  • Photographs and documentation of any property conditions that might affect its value


3. Attend an Open House

The simplest way to have your assessment reviewed is by attending an open house. Take your evidence and talk to an assessor at one of many open houses being held in communities across Manitoba and you may find they lower your assessed value right there. Don’t miss the Open House for your area, schedule is at http://www.gov.mb.ca/mao/public/reassessment.aspx. Virtual meetings also available at your district office for your municipality.


4. File a Formal Appeal

If informal discussions at the Open House or virtual meeting do not resolve the issue, you will need to file a formal appeal. In Manitoba, the appeal is typically done through your local Board of Revision. The deadline for filing an appeal is usually within a specific period after receiving your assessment notice, so it’s important to act promptly.


5. Prepare for the Hearing

Prepare to present your case at the appeal hearing. This includes organizing your evidence and being ready to explain why you believe the assessment is incorrect.


6. Attend the Hearing

Attend the appeal hearing and present your case to the Board of Revision. Be clear, concise, and respectful in your presentation. Answer any questions the board may have.


7. Await the Decision

After the hearing, the Board of Revision will make a decision on your appeal. If your appeal is successful, your property assessment will be adjusted, and your property tax bill will be recalculated. However, you may need to repeat this process each time your property is reassessed.


How Kemp Appraisal Can Help

At Kemp Appraisal, we offer professional appraisal services to support your property tax assessment appeal. As a certified appraiser I can provide an accurate and detailed report that can serve as compelling evidence in your appeal. Here’s how I can assist you:


  • Accurate Market Valuations: We provide precise market valuations based on retrospetive data and thorough property inspections.

  • Comparable Sales Analysis: We analyze sales as of April 1, 2023 of comparable properties to support your case.

  • Professional Reports: Our detailed appraisal reports are designed to meet the standards required by assessment appeal boards.

  • Expert Testimony: If needed, I can provide expert testimony at your appeal hearing to further support your case.


Conclusion: Appealing your property tax assessment in Manitoba can lead to significant savings if your property has been grossly overvalued. Understanding the process and gathering the right evidence are key to a successful appeal. At Kemp Appraisal, we are committed to helping you achieve a fair and accurate property assessment. Contact us today to learn more about our services and how we can assist you with your property tax assessment appeal.


Laura Kemp, P. App, CRA

Kemp Appraisal Ltd.

Phone: 204-791-1746


 Addendum 1: Definitions and Calculations

 

Mill Rates

Each Rural Municipality (RM) and School Division has its own mill rate, which is used to calculate property taxes. Here are the current mill rates for a few:

RM of Alexander is 12.173 mills

City of Winnipeg is 13.352 mills

Provincial Education Mill Rate is 8.14 mills 

Lord Selkirk School Division is 12.8951 mills 

Sunrise School Division is 11.518 mills

Mill Rates change every year!

Market value is the price a willing buyer would pay for your home in the open market, considering all its unique attributes and current market conditions.


Assessed value, on the other hand, is a value determined by the local taxing authority for the purpose of calculating property taxes. This value is designed to be fair and equitable within the context of the broader community, rather than a precise reflection of individual market transactions.

 

Portioned Assessment, the municipality determines the assessed value of your property and multiplies it by a factor based on property classification (45% for Residential 1) to determine the “portioned assessment.”


Sample Tax calculation #1: House assessed at $485,000

Portion % 45                                               Portioned value      $218,250

Education Taxes

$218,250 x 0.010419 (Pembina Trails Mill Rate 10.419)           $2,273.95

MB Education Tax Credit Advance   (2024)                               -$350.00

MB School Tax Rebate 2024 (50% of $2,273.95)                  -$1,136.97

                                                          NET SCHOOL TAX      $786.98

Municipal Taxes

$218,250 x 0.013352 (City of Wpg Mill Rate 13.352)             $2,914.07

Street Renewal – Frontage Levy                                              $394.76

TOTAL MUNICIPAL TAX $3,308.83

TOTAL PROPERTY TAX  $5,582.78

Provincial Credit    -$1,486.97

NET PROPERTY TAX    $4,095.81


Sample Tax calculation #2:    House assessed at $425,000

Portion % 45                                                  Portioned value $191,250

Education Taxes

$191,250 x 0.010419 (Pembina Trails Mill Rate 10.419)           $1,992.63

MB Education Tax Credit Advance   (2024)                               -$350.00

MB School Tax Rebate 2024 (50% of $2,273.95)                  -$996.32

                                                          NET SCHOOL TAX      $646.32

Municipal Taxes

$191,250 x 0.013352 (City of Wpg Mill Rate 13.352)             $2,553.57

Street Renewal – Frontage Levy                                               $394.76

TOTAL MUNICIPAL TAX $2,948.33

TOTAL PROPERTY TAX  $4,940.96

Provincial Credit    -$1,346.32

NET PROPERTY TAX        $3,594.65


A SAVINGS IN TAX OF $501.16

Appraisal Fee $500 = Net Savings $1

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