Why Property Assessments Often Don’t Match Today’s Market Value

Every year, homeowners receive their property assessment notice-and almost every year, the same question comes up:
“Is this what my home is actually worth?”

The short answer is: not necessarily.

Property assessments are designed for one primary purpose-fairly distributing municipal property taxes. While they play an important role in that system, they are not built to reflect real-time market value. Here’s why the gap exists and what homeowners should understand before making real estate decisions based on an assessment notice.

Why Assessment Values Lag Behind the Market

1. They’re based on old market data

Assessment values rely on a valuation date that can be six to eighteen months old. In active markets like the North Shore, conditions can shift quickly-interest rates, buyer demand, inventory levels, and neighbourhood activity all change faster than assessments can keep up.

By the time your notice arrives, the market may already look very different.

2. No one has seen the inside of your home

Assessors don’t tour your property. They don’t see:

• Renovated kitchens or bathrooms

• Finished basements

• New flooring, windows, or layouts

• Overall upkeep and condition

Unless updates were officially recorded through permits, they usually aren’t reflected. Two homes with the same footprint can have very different market values-and assessments often can’t capture that difference.

3. Homes are grouped, not individually evaluated

Assessment systems rely on mass appraisal models, grouping properties by broad characteristics. Buyers don’t shop this way.

Real people care about:

• Natural light and layout

• Outdoor space and views

• Finishing quality

• Curb appeal and street presence

• How a home feels when they walk through it

Those details matter in pricing, but they don’t show up in an assessment formula.

4. The system is built for taxation-not pricing

Assessments prioritize consistency, not precision. Their goal is to allocate tax responsibility evenly, not to determine what a specific home would sell for today.

That’s why lenders, appraisers, and Realtors rely on recent comparable sales, not assessment notices.

What This Looks Like in the Real World

It’s very common to see meaningful differences between assessed values and current market prices.

For example, a property may be professionally appraised-after a full inspection and review of recent comparable sales-at $575,000, while the assessment places it closer to $515,000. In the real estate industry, that type of discrepancy isn’t unusual at all.

When it comes to financing, buying, or selling, professionals always look at current data, not assessment figures.

What Homeowners Should Keep in Mind

If you recently bought your home

A lower assessment doesn’t mean your home has lost value. It usually reflects outdated market information rather than current conditions.

If you’re preparing to sell

Using your assessment as a pricing guide can lead to unrealistic expectations-either too low or too high. Buyers base their decisions on recent sales, not assessment notices.

If you’re buying

Relying on assessment values during negotiations can create unnecessary friction. Sellers price based on what similar homes are selling for right now, not last year’s valuation date.

If your assessment went down

A lower assessment may reduce your property taxes, which is certainly welcome. But it does not indicate a decline in what your home would sell for in today’s market.

The Takeaway

Property assessments serve an important municipal purpose-but they were never intended to guide buying, selling, or refinancing decisions.

If you want an accurate picture of your home’s value, the most reliable tools are:

• Recent comparable sales

• Professional appraisals

• Local market expertise

Every neighbourhood-and every home-has nuances that a mass system simply can’t account for.

If you have questions about your assessment, your property value, or the current market, I’m always happy to help.

Call or text: 604-929-7753
Email: darcymcclary@me.com