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Assessed values of some rural manufactured homes in B.C. skyrocket

In December 2022, the BC Assessment Authority announced that province-wide, homeowners should expect a five per cent to 15 per cent increase in their 2022 property tax assessment values. 

On that same day, BC Assessment mailed out advance notice letters to property owners whose assessments saw considerable increases compared to the average in their jurisdiction. 

It is prudent to remember that a yearly increase in taxation value does not always result in an increase in property taxes owed. That is unless your property value is above the average value change for your jurisdiction and property class.


Steep increase in assessed value


A valued client, who was notified by one of these advanced letters, has relayed that their assessed 2022 taxation value is set to increase by a whopping 54 per cent, compared to the draft 18 per cent average in Jurisdiction 727, Williams Lake Rural. 

The letter stating this advance notice offered an opportunity for the property owner to call and speak to one of BC Assessments appraisers prior to receiving the mailed-out assessment, and they did place a call.

Keep in mind this particular property is 10 rural, riverfront acres with a single-wide, two-bedroom mobile home manufactured in 1995. One might jump to conclude that this huge increase in taxation value can be attributed to the riverfront land being the catalyst. 

But you would be wrong; the lion’s share of the assessed 2022 value increase is on the mobile home itself.

A 27-year-old mobile home, previously assessed at $55,400 in 2021, is now being assessed for $116,000, a $60K increase, year-over-year. In 2021, BC Assessment had devalued the mobile by $1700, even with an increase in the land value.


Increase in manufactured home value


Such a drastic increase in one year required an explanation. After speaking to a BC Assessment Authority representative, my client was told that they are one of many manufactured home owners province-wide who will see a significant 2022 dwelling assessment value increase. 

Having previously owned several older mobile homes on acreages in BC over their lifetime, my client’s experience had always been a small year-over-year depreciation in the value of their dwellings, even after renovations and improvements.

A historic drawback to owning a manufactured home has always been its questionable long-term value, which is why many will not entertain owning one. 

Manufactured homes are factory built to CSA standards. If they are installed with rodent-proof insulated skirting, lived in year round and receive proper annual maintenance and re-roofing when required, they can remain structurally sound. 

Even so, a manufactured home’s longevity, mortgage ability, and equity-building capacity are less than a conventional home on a foundation. 


Long-term value


After a manufactured home reaches 25 years of age, it no longer qualifies for an insurable mortgage through CMHC, and willing lenders will require at least a 20 per cent down payment, if not more, based on the determined remaining economic life of the manufactured dwelling. 

Manufactured homes over 25 years old drastically increasing in assessed taxation value (some above conventionally built homes in the same neighbourhood) is something we have never seen… until now.

Homeowners must realize that lenders only entertain mortgage and equity loan applications based on current market appraisal value for all types of dwellings. 

BC Assessment uses a snapshot of jurisdictional market values and comparable property sales to assess your property’s taxation value. Still, you cannot use your assessment value alone to determine your property’s current market value.

BC Assessment reported last April that less than two per cent of property owners contested their 2021 assessments and attributed it to the correctness and fairness of their evaluation processes. 


Impact on homeowners


It could also be attributed to the growing number of homeowners that welcomed a higher valuation in hopes of using their property as wealth to borrow against the equity of their home or that homeowners plan to sell their homes in the not-too-distant future and want the increase in valuation to help support a higher asking price. 

The unprecedented, top-of-cycle demand that fuelled market price increases in 2022 has disappeared but will continue to affect the 180,000+ households living in manufactured homes disproportionately. 

Many of them are seniors and low-income earners who are already struggling with energy and food inflation. The coming increase in rural property taxes could see mobile homeowners paying higher taxes for many years to come with an uncontested overvaluation.   


Reasons for increases in assessed value


The logical reason for the increase in 2022 tax assessments is the 40-year inflationary spike in operating costs to provide the fundamental services required, including; hospitals, schools, libraries, policing, and road maintenance. 

Along with services, your rural property taxes help fund the Municipal Finance Authority, which ensures local governments get lower interest rates when they need to borrow money. 

Ironically, manufactured homeowners who will now be paying higher taxes may be unable to secure refinancing themselves at affordable interest rates due to regulatory lending policies that continue to deem the dwellings as sub-par.


 Future considerations


Going forward, if you have a client considering the purchase of a manufactured home on a lot or acreage, they’ll need to understand that the dwelling’s value for taxation purposes may increase and, at the same time, decrease in market value much faster than a traditional dwelling, along with being harder to obtain financing, refinancing and insurance on in the future. 

Share your knowledge to help them make an informed and educated decision about the property’s current and future longevity and investment value. The pros must outweigh the cons for any property investment to be deemed worthy of your hard-earned dollar.