Assessment Process

For assessment and ultimately taxation, the City of St. John's must determine the market value of all properties as of a single date, known as the base date. The base date for the 2024 and 2025 assessment notices is January 1, 2022. The base date for the 2026 and 2027 assessment notices is January 1, 2024.

Market value is: "The most probable price, as of the base date, for which a property would sell after reasonable exposure in a competitive market, with a willing buyer and seller acting prudently, knowledgeably and for self-interest, assuming that neither is under duress."

Market value for assessment purposes is retrospective (historical) value, not the current value. When reviewing your assessment notice, remember that the value stated on the assessment is as of the base date - not what the property is worth today.

Valuing a Property

To determine the market value an assessor will use a combination of three different approaches:

1. Direct comparison

This is the most common valuation approach. Sales of comparable properties near or on the base date are analyzed.

2. Income

An income-producing property's ability to earn revenue is tied to its market value. This involves a detailed analysis of a property's income and expenses and then compare that to similar properties. This helps determine how much income a property can generate. The relationship between income and sale prices is analyzed to calculate the capitalization rate (cap rate) for the property by dividing the income by the sale price.

3. Cost

The cost to replace buildings, structures or other taxable components is calculated and then reduced by deductions for depreciation due to age, and functional or economic conditions. The value of the land is then determined and added to the depreciated replacement cost to produce an estimate of market value.

Mass Appraisal

Mass appraisal is the process of valuing a large number of properties at the same time using standardized methods and statistical models.

In this phase:

• A large number of properties are valued simultaneously.
• Often based on the Market-Adjusted Cost Approach or mass sales models (e.g., multiple regression analysis). It uses generalized data: building type, size, age, location, etc.
• Prioritizes efficiency and uniformity, not exactness, at the individual property level.

The goal of completing assessment by a mass appraisal approach is to value all properties fairly and equitably using a standard method, not to appraise each one exactly as a private appraiser would.

Mass Appraisal vs. Individual Property Appraisal (Residential Properties)

The City uses a mass appraisal approach, which values all properties as of a base date using standardized models. These models draw on:

• Recent sales data
• Property characteristics (e.g., square footage, age, lot size)
• Neighborhood trends
• Adjustments based on market conditions

This process does not always involve annual onsite inspections, but instead uses digital records, building permits, aerial imagery, and other data sources to track changes.

Uniformity Does not Mean Equal

While it may seem that your property is similar to your neighbors, not all homes are truly equal. Some examples of what may cause differences in valuation include:

• Renovations (kitchens, bathrooms, flooring, basements)
• Additions (garages, decks, sheds)
• Interior upgrades (e.g., finished basement)
• Property condition (based on age, reported data, or prior inspections)

Some of these changes may not be visible from the street but still influence valuation if they've been captured through permits, previous inspections, or modeling updates.

While the mass appraisal process aims to be fair and consistent, market conditions, historical valuations, and property-specific data can result in variation.

Why Your Increase May be Higher than “the average”

There are several possible reasons a property may experience a greater-than-average increase:

• It may have been undervalued in the previous cycle, and the new assessment corrected that.
• The model used for reassessment captured features or upgrades to the property there were not present in other neighboring homes.
• The area the property is located in experienced stronger sales activity or rising prices.