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In an article published on October 3rd in the Magog newspaper ‘Le Reflet du Lac’, there was talk about municipal assesments in the MRC of Memphremagog. The author noted that the certified appraiser, Jean-Pierre Cadrin, granted  ‘reasonable’ increases, he said, to six of the seven municipalities adopting a new assessment role.

After reading the article, I could not help but highlight some observations based on our experience on the ground as well as the latest real estate data for the area. As a first step, it is important to clarify that municipal assessments are sometimes very random or uncertain. On each territory, immovable are appraised for a three-year role. These assessments are produced almost a year and a half before the entry into force of a new role in anticipation of the three subsequent years. Off so the most accurate way to determine the expected value of a property is to select three to five recent sales, ideally completed during the last six months, comparable to the subject in its immediate area. Then comes  mathematic adjustments for the distinct elements of the subject being assessed; land size, living area, age and general condition of the building, garage and other options or uogrades. In other words, the real value of a property is the price a properly informed buyer is willing to pay in normal conditions for the current market.
Many sellers and home buyers, often wrongly, base their opinions on municipal assessments. Here are some recent examples of real estate transactions that demonstrate incorrect property assessments in some cases;
• All brick house, 180PI of shoreline on Lake Lovering, Township of Magog area, sold in July for $ 420,000 – Municipal Assessment: $ 512.700 – Standardized Assessment (for tranfer tax calculation): $ 533.208. The buyer has to pay a “welcome tax” of $ 6.498 based on $ 533.208 rather than the price paid of $ 420,000 – A surplus of $ 1.698 for the Town.
• House w dbl garage built in 2006 on two acres, Township of Magog area, sold in July at a price of $ 405.500 – Municipal Assessment: $ 505,000 –  Standardized Assesment (for transfer tax calculation): $ 525,000. The buyer has to pay a “welcome tax” based on $ 525,000 rather than the price paid of $ 405.500 – a surplus of $ 1.792 for the City.
• 1992 two-storey house with attached garage on one acre, Township of Magog sector, sold in October for $ 366,000 – Municipal Assessment: $ 409.700 – Standardized Assessment (for transfer duties): $ 426.088. The buyer has to pay a “welcome tax” calculated on $ 426.088 rather than the price paid to $ 366,000, a surplus of $ 901 for the City.
• 1994 two-storey house with attached garage, between North Merry Street and Des Pins in Magog, sold in late August at a price of $ 290,000 – Municipal Assessment: $ 359,000 – Standardized assesment (for transfer duties): $ 373.360. The buyer has to pay a “welcome tax” of $ 4.100 based on $ 373.360 rather than $ 2.850 if the tax had been calculated on the price paid of $ 290,000. A surplus of $ 1.250 for the City.
The four previous examples clearly demonstrate overvalues in different areas of Magog. These buyers are somehow ‘penalized’ because they had to pay higher transfer taxes. By the same token, they will get higher municipal and school taxes.
In many other cases, the opposite is also true. Sales beyond the assessment were recently concluded in various sectors of the MRC of Memphremagog. Does this mean that the municipalities are loosing on transfer taxes? Not really because the law provides that the buyer must pay the ‘welcome tax’ on the highest of these two amounts; the standardized municipal evaluation OR the price paid. Here are some other examples of discrepancies between prices paid and property assessments;
• Prestigious property on 5 acres on the shores of Lake Memphremagog in Austin, sold for $ 3,725,000 in October – Municipal Assessment: $ 1,828,000 – standardized assessment: $ 2,010,800, a difference of $ 1,897,000 between the price paid and the current municipal assessment.
• 4 Season cottage on Lake Des Francais in Orford, sold $ 440,000 in September – Municipal assessment: $ 337.500 – standardized assessment: $ 351,000. The property has been sold $ 102.500 above the municipal valuation – calculation of transfer taxes will be on the selling price. The buyer will pay $ 5.100 to the municipality as a welcome gift.
• Always on Lake Des Francais in Orford, a few steps from the previous subject, property sold $ 290,000 in August VS a  municipal evaluation of $ 361.900 – a transaction at $ 71.900 under the municipal evaluation when a neighbor has just sold $ 102.500 above.
• 4 season cottage on the estate ‘Chéribourg’ sold $ 208,000 in October – Municipal assessment: $ 150.400 – standardized assessment: $ 156.416. The property has been sold $ 57.600 over the municipal evaluation. The calculation of transfer taxes will be on the selling price.

Buyers from Montreal and the South Shore, areas where assessments are more in line with market prices, are often confused by our listing prices VS the municipal data. Buyers and sellers should always consult a local Real Estate expert  rather than trying to make their own estimates based on municipal values.
With respect to statistics compiled by © Centris, the largest real estate portal in Quebec, it is shown that, from January 1st to September 30th of this year, sales of single-family homes in Orford are traded on average at 174% of the municipal assessments (40 sales) and at 100% for condo sales (18 sales). In Magog, the difference is smaller as the average single family home sale is at 104% of the municipal assessment (150 sales) and at 103% for condominium sales (61 sales). The  market seems less active in North Hatley with only 7 home sales transacted at 90% of the municipal assessments for the first 9 months of the year.
If you’re curious about how much you cost would be for transfer duties on a property like yours or another one that might interest you, you will find an instant calculation tool on Team Bourgon’s website at www. under the  tab ”TOOLS”.

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