Market Value

For assessment and 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 2024 and 2025 assessment notices is January 1, 2022.

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 is a retrospective (historical) value, not the current value. When reviewing your assessment notice, remember that the value stated on the assessment is as of January 1, 2022 - 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. We analyze sales of comparable properties near or on the base date.

2. Income

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

3. Cost

We calculate the cost to replace buildings, structures or other taxable components. We then apply 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.