HOW ASSESSMENTS ARE PREPARED
An appraisal is an estimate of value.
Properties in Alberta are assessed using a method called mass appraisal. Mass appraisal is the process of valuing a group of properties as of a given date, using common data, mathematical models, and statistical tests.
Mass appraisal techniques allow assessors to accurately value a large number of properties in a short period of time. Before an assessment can be prepared, property data must be collected. Accurate and complete property records lead to more accurate assessed values. The more accurate the assessed values, the more equitable the entire assessment system is.
KEY CHARACTERISTICS OF MARKET VALUE
- It is the most probable price, not the highest, lowest, or average price.
- It is expressed in terms of a dollar value.
- It assumes a transaction between unrelated parties in the open market.
- It assumes a willing buyer and a
- willing seller, with no advantage
- being taken by either party.
- It recognizes the present use and potential use of the property.
The valuation date is a fixed point in time at which assessment values are based.
The valuation date ensures all properties in a municipality are valued as of the same date. The valuation date set by the Municipal Government Act is July 1 of the previous year. For example, for the 2016 tax year, the valuation date for property assessment is July 1, 2015. This means that a 2016 property assessment must reflect the mass appraisal value of the property as of July 1, 2015.
The second legislated date in the valuation process is the condition date. The condition date, of December 31 of the previous year, is the date on which the condition of the property is recorded for property assessment purposes.
An assessor may decide to inspect a property.
An inspection is conducted so all characteristics of the property that affect the assessment are considered when the assessor determines the property’s value. All newly constructed properties require an inspection. Existing properties need to be reviewed occasionally to ensure information used to create the property’s assessment remains accurate.