The City of St. John’s Assessment Division recently mailed out its Year 2017 Assessment Notices dated 20th September 2016. You have until 1st November 2016 to
file your appeal. This is the second year of the tri-annual assessment cycle: a successful
appeal will continue for the remaining two years of the cycle.
The legislated basis for your Year 2017 Assessment is your property’s market value on 1st
January 2014 (the “Base Date”) having regard to its current physical condition. If you filed
an appeal last year and it has been resolved, you have nothing to fear for the remainder of
the re-assessment cycle (assuming your new notice reflects the reduction you secured for
2016). If you did not appeal last year, or your appeal from last year has not yet been
resolved, the time to act is now.
If your property’s market value is less than its assessed value, it is over assessed and you
should file an appeal on or before 1st November 2016. Market value is the price the
property would command if it were sold to an “arm’s length” purchaser (i.e. to a nonrelated
buyer) for cash or subject to conventional financing. It is not necessarily the price
that would persuade you to part with the property but rather the price you could expect if
you decided voluntarily to dispose of the real estate. The best evidence of market value is
the sale prices of similar properties that were sold within six months of 1st January 2014.
If your property is assessed at less than its 1st January 2014 market value, you may still
be over-assessed because the Assessment Act mandates that your property has to be
assessed in a uniform manner. This provision attempts to ensure that the tax load is
spread across the municipality’s property inventory in an equitable manner. It also
discourages the City of St. John’s Assessment Division from deliberately under-assessing
property to thwart appeals. So, if for example, commercial properties are assessed on
average throughout the municipality at 70% of their market value, you will have grounds
for appeal if your property’s assessment exceeds this percentage. If similar properties to
your own are assessed at lower unitised rates (e.g. per square foot for office, industrial
and retail property; per room for hotels, apartments and seniors’ housing), that is also a
sign that you may not be equitably assessed, and may be grounds for appeal.
The Bottom Line: If you did not appeal last year, or your appeal from last year has not
yet been resolved, you get another kick at the can. You should appeal if your property is
assessed at more than, (1) its market value on 1st January 2014, or (2) the assessment of
other, comparable properties… or if you harbour any doubt that your property is overassessed.
A successful appeal will continue for the remaining two years of the reassessment
cycle.
Action Required: If you file an appeal, be careful not to restrict your grounds of appeal.
We recommend that you use the following wording: “The assessment is excessive, unfair,
not uniform with other assessments, and any other grounds that may appear.” If you
prefer, we will file the appeal for you. For advice on whether to appeal, call our
Newfoundland Tax Team, André Pouliot or Mark Turner at (709) 722-1811 (St. John’s) or
1-800-567-3033 (toll free), or email them at apouliot@turnerdrake.com or
markturner@turnerdrake.com.