Valuation Fundamentals

Market Value

Market value is a means by which taxpayers may evaluate their assessment by referring to an objective standard. If all properties meet the market value standard, all properties are equitable assessed, regardless of whether they are similar.

Definitions:

Municipal Government Act (MGA)

Market value is defined in section 1(n) of the MGA as:

"… the amount that a property might be expected to realize if it is sold on the open market by a willing seller to a willing buyer."

Implicit in this definition is the consummation of a sale as of a specific date, transferring the title from the seller to buyer under conditions whereby:

There has been sufficient time for exposure in the open market
The buyer and seller are not subject to undue pressure
The buyer and seller are both well informed
Payment is consistent with the standards of behavior of the market

Difference between Market Value and Sale Price

Market value is a range of probable selling prices, not a specific price. If the market is reasonably competitive, prices can be strong evidence of market value. A sale price is the amount the purchase agrees to pay and a particular seller agrees to accept under the circumstances surrounding their transaction. Sale price is a historical fact - the figure that a particular buyer and seller agreed to in a particular transaction. Market value is the value created by the collective actions of the market.

Establishing Market Value

In estimating market value there is a need to have an understanding of the market or trading area for a property type. A real estate market is the interaction of individuals who exchange real property rights for other assets such as money. Some properties are compared or grouped with only those properties in the immediate area; other properties are compared or grouped with similar properties in a much broader area.

For additional information regarding assessment details for your property contact the assessor at the MD of Taber Office (403) 223-3541