Why is the Asking Price Higher Than the Assessed Price?
Market Value: According to the Province of Nova Scotia
The Nova Scotia Assessment Act states that all properties in Nova Scotia must be assessed at market value. This approach is considered the most equitable and widely accepted system in North America and throughout the world. All provinces in Canada use this approach.
Market value:
- Is the most probable price, not the highest, lowest or average price
- Is expressed in terms of money
- Implies a reasonable exposure time to the market
- Assumes an “arm’s length” transaction in the open market, which is assuming a willing buyer and a willing seller with no advantage being taken by either buyer or seller.
Reprinted from the Provincial Property Assessment site
Market Value-According to the Real Estate Industry Worldwide
The price that a willing buyer will pay, and a willing seller will sell at, assuming that neither party is acting under undue influence-(transfer, divorce, death, etc)
Almost all property in Nova Scotia is sold at prices higher than the “assessed value” so then how can you use the “assessed value” to determine the market value of a home…in a nutshell, you can’t!
Two identical homes on the same street in all probability have a different assessment based on when they sold last!
Theoretically it takes up to 2 years for a property assessment to “catch up” to the sale of a home, but in reality it happens much sooner as it is in the provinces best interest to increase the tax revenue. (not the taxpayers unfortunately)
If you asked most Nova Scotians “would you sell your property for the assessed value by the province” the answer would probably be “NO” Homes sell for more than the assessed value every day, and in the cases where that doesn’t happen it usually means that the home has been “over assessed” and was never appealed by the owner!
Market value is made up of supply & demand, economic conditions, time of the year, and many other factors, it is current, right now, and reflects what people are actually paying for property that they are going to live in.
Provincial property assessments are a political football, they always seem to be going up!
Our goal is to provide you with “real world” information so you can make an informed buying or selling decision.