With 2021 being a revaluation year for tax purposes, properties in Saskatchewan have been revalued. and at this time of year most municipalities have their assessment rolls open and property owners have the opportunity to appeal their assessments.
The Saskatchewan Assessment Management Agency (SAMA) is an independent agency that has developed an assessment system and is tasked by the provincial government to provide property valuation services to local governments.
Through SAMAView, land owners are able to check their valuations and compare them to others and every four years there鈥檚 a valuation year where SAMA updates all the values for all properties in the province to ensure they鈥檙e current鈥�2021 is a valuation year.
SAMA CEO Irwin Blank says the agency started over 30 years ago when the province wanted to provide municipal governments with a better property assessment process.
鈥淪AMA was actually the creation of the recommendation of a committee called the Local Government Finance Commission that was created by the provincial government in the early 1980s in recognition of the fact that the property assessment system was not being given the level of attention that local governments thought it should be given,鈥� said SAMA CEO Irwin Blank. 鈥淪o the Local Government Finance Commission recommended that an agency like SAMA be created that would be governed by a board of directors and the government agreed.聽
鈥淚n 1987, SAMA was created with the passage of the Assessment Management Agency Act and we have a board of directors who govern us and the majority of the board members were elected officials from local governments鈥攗rban and rural municipalities鈥攚ith the minority being appointed representatives from the province.鈥�
The revenue created through property taxes via SAMA鈥檚 assessment system is a key cog in municipal governments鈥� funding with a large chunk of it being poured into the education sector at a local level.聽
鈥淪AMA is responsible through our board of directors for establishing the formulas, the rules, and the procedures that are used to establish assessed values that are used for property tax assessments for every property in Saskatchewan,鈥� he said. 鈥淭hat assessment currently provides over $2.1 billion in annual revenue to local governments鈥攖hat鈥檚 both municipalities and the education sector each year.聽
鈥淚t鈥檚 very substantial, it鈥檚 the major source of revenue for most municipalities that they use to sustain all of the necessary community functions, to keep things rolling. About $750 million of that $2.1 billion goes to the education sector, that represents just under 40 per cent of the total kindergarten to grade 12 operational funding for the education system鈥攜ou can imagine what the education system would be like without that revenue to support it. Our assessment system essentially provides that predictable鈥攈opefully stable鈥攆inancial foundation for local governments to utilize to give revenue to sustain their communities. That鈥檚 why we exist.鈥�
Having developed a thorough system to evaluate property worth through multiple formulas, SAMA doesn鈥檛 need to have their appraisers travel to every property in the province to develop the valuation number unless there鈥檚 a physical change on the property reported by the municipal government says Blank.
鈥淲e鈥檝e got a team of over 100 assessment appraisers that all have particular training and they鈥檙e fully licensed and accredited鈥攚hich you need to be to undertake valuations in Saskatchewan,鈥� he said. 鈥淭hey actually go out at the request of municipalities to check whenever there鈥檚 new properties that are built or renovations are done on a property or a subdivision is developed or if something is torn down. When those things happen, we鈥檙e asked by the municipality to go out and check those properties and collect the physical characteristics of those properties.聽
鈥淎lso, on an ongoing basis, every week we get all the sales that occurred through information services corporation of any properties in any municipalities we serve and we鈥檙e continually validating those sales. We utilize that information to establish market rates which we apply to the physical data we collect. The assessment system is an ongoing process of collecting and keeping physical data up to date for all properties and utilizing market evidence combined with cost information to establish assessments that are supposed to be reflective of the average selling price of those properties as of a particular point in time, which we call our valuation base date.聽
鈥淥nce every four years we update that valuation base date鈥攚e don鈥檛 go out and physically check all the properties once every four years, but once every four years we look at all the current marketing information based on all of the sales that occurred over the previous four year period,鈥� he said.聽
鈥淲e then use that updated sales information to update assessments to reflect that more current valuation base date.鈥�
Due to many communities throughout Saskatchewan being rural, it can be difficult to use surrounding sales information to determine property worth. Blank explains that鈥檚 why SAMA has developed a system using specific formulas to help with the process.聽
鈥淚n most municipalities in Saskatchewan we鈥檙e applying what we call the cost approach,鈥� he said. 鈥淭he cost approach is considered the best approach to use in areas where you don鈥檛 have a huge amount of sales information and you don鈥檛 have a huge number of properties that are actively leased/rented in the market where the buyers of properties are actually buying those properties to get that rental income.聽
鈥淚n most small communities you don鈥檛 have enough properties that fit those categories so then the standard approach followed there is to determine what it would cost to reconstruct those properties and we have cost guides and manuals that provide that cost information. Anything that would be associated with the cost to construct a property would be things that we consider as part of establishing the assessed values. So we see what it would cost to build that property new and then we ask how old that property is. How many years ago was it built? What condition is it in? Good, average, or poor? That then effects how much depreciation we apply to that particular replacement cost to determine how much the depreciated replacement cost is. To that we add the known value based on whatever sales information we can get鈥攊t鈥檚 primarily on vacant land sales in the area.
鈥淪o we know land in the area is selling for this much, we know the replacement cost of the property is this much and we鈥檝e depreciated it, and the final step in the process is to look at actual sales of those kinds of properties from that area over the previous four year period leading up to the base date,鈥� he said.聽
鈥淲ith that we look at on average when these properties are selling, are they selling for the full replacement cost plus depreciation and the land value? Are they selling for a little more than that? Are they selling for a little less than that? And we adjust the cost based assessments using what we call a market adjustment factor to bring them in line with what the selling prices are telling us is the average selling price of those kind of properties in that area. That鈥檚 how we come up with the assessments.鈥�
When SAMA鈥檚 property assessments come out, land owners are able to review them and have a window to decide if they want to appeal them. Blank says every municipality in Saskatchewan has a local board appointed to hear these challenges from land owners.
鈥淚n a revaluation year鈥攖his year is a revaluation year鈥攚e鈥檙e updating all the values for all properties to reflect a more current valuation base date. In 2021, all the new assessments are going to be reflective of what most properties are selling for on average as of January 1, 2019,鈥� he said.聽
鈥淭hat鈥檚 a four year move from what last year鈥檚 assessments were supposed to reflect鈥攖he 2020 assessments were supposed to reflect the average value of those properties as of January 1, 2015, which had been in place for the previous four years. In a revaluation year, the opportunity for people to inquire and potentially challenge their assessments is doubled from a non-revaluation year.
鈥淔rom the time that assessments are placed on an assessment roll and advertised as being available for review, property owners have 60 days to review that property assessment and ask questions about it鈥攚hich they can do any time鈥攁nd they can also go on our SAMAView website which provides free access to any property owner across the province to look at their assessments and compare it against their neighbours鈥� assessments. If they鈥檙e satisfied their assessment is fair, that鈥檚 where the process usually ends, but if they look at it and think something isn鈥檛 right, they can challenge it and have a 60-day period to launch an appeal with their local board of revision鈥攁 group of local folks the municipality would appoint to sit as a board of revision.
鈥淏efore the board of revision happens, there鈥檚 usually a process where our assessment appraiser will contact whoever appealed the property and try to find out what their concerns were and if an error was made,鈥� he said.聽
鈥淟et鈥檚 say we haven鈥檛 checked the property for physical data for quite a few years and we haven鈥檛 assessed for a garage that was torn down four years ago, but for whatever reason it wasn鈥檛 reported by the local municipality so we never checked it out. If we find out that there鈥檚 an error of that type there, we can recommend an agreement to adjust and at that point just correct the assessment without having to have the person go in front of the board of revision to get that done.聽
鈥淭he first step is the appraiser contacting the person who has launched an appeal to inquire about the issues and if there is an error we try to work with the land owner to fix it and we show them what the assessment should be and if they agree and sign off on it then that鈥檚 where the process ends. If they can鈥檛 come to a meeting of the minds there and our folks don鈥檛 see an obvious error that should be corrected then the property owner goes in front of the board of revisions. It鈥檚 a somewhat informal process, but they do need to have some substance at that stage鈥攖hey can鈥檛 just say, 鈥業 think my value鈥檚 too high,鈥� they have to say, 鈥業 think my value鈥檚 too high and here鈥檚 why.鈥� 鈥�
When there鈥檚 an appeal it鈥檚 up to the locally appointed board to make a final decision, but if the property owner or SAMA appraiser don鈥檛 agree with the board鈥檚 decision, the appeal process can continue at a provincial level, says Blank.聽
鈥淭he appeal final decision is made by the local board of revision,鈥� he said. 鈥淭hat local board of revision has that authority to determine if in fact this person has a case and they agree and suggest the assessment should be changed to a certain amount鈥攚hatever the appeal is seeking. For example if they say, 鈥榳e agree this property is in poorer quality than what SAMA has rated it and we think it should be rated as a poor quality,鈥� they can ask our appraiser to tell them what the assessment would be at that poor quality and once the appraiser indicates that, they can say, 鈥榯hat鈥檚 what our decision is going to be.鈥櫬�
鈥淭hat鈥檚 not the last step in the process though, if either party comes out of the board of revision and feels that justice wasn鈥檛 served they can then appeal to a higher provincial level called the Saskatchewan municipal board. That Saskatchewan municipal board has oversight across the whole province and these are folks who are appointed by the province to be that second level of appeal.
鈥淚t鈥檚 still relatively informal鈥攜ou don鈥檛 need lawyers or anything like that鈥攂ut these guys are that much more well trained in the whole process. They can be that final point of review for any issues of fact and interpretation of those things.鈥�
