Dear Ms. Hage and Mr. Dow,

Thank you for your inquiry and the opportunity to respond to your questions. I have 

provided below information that I trust will assist with understanding 2015 property 

assessments on Saturna and Mayne Islands.

BC Assessment produces annual market value assessments for approximately 

2,000,000 properties in the province of BC including approximately 146,000 within the 

Capital Region. There are 680 properties on Saturna Island and 1,392 properties on . 

Mayne Island.

For residential property assessments, BC Assessment (BCA) employs a sale 

comparison approach in conjunction with a market adjusted cost model. That is to say, 

we collect and maintain attributes on each property which are recognized as market 

drivers and are aligned with market preferences. Each year we conduct analyses 

through sale comparison to trend our assessments to market value. Due to the volume 

of assessments that must be produced each year, we employ the use of mass appraisal 

techniques and models in our processes.

Econometric Model

The Sales Comparison Approach models the behavior of the market by comparing the 

properties that are being appraised with similar properties that have recently sold. The 

economic principles of supply and demand provide the framework for understanding 

how the market functions. Supply is influenced by current inventories and demand is

influenced by general economics such as population levels, mortgage rates, income 
levels, local services, personal housing preferences and the cost of substitutes. The 
principle of substitution ensures that prudent purchasers will not pay more than a 
comparable property with similar utility and implies that the market will recognize 
differences in utility between a property and its best alternative by a difference in price.
The Sales Comparison Approach estimates the market value of a property by adjusting 
the sale prices of comparable properties for differences between the sold properly and 
the property being assessed. Mass appraisal builds on the same basic principles but 
involves the appraisal of many properties as of a specific date. Mass appraisal 
techniques employ equations, tables and rate schedules, collectively called models. 
These principles are the basis for the creation of our market value assessment roll.
Accurate land values are central to an effective assessment system or model. It is the 
first stage in our residential mass assessment model and land valuation is foundational 
to achieving the total assessed value where an improvement exists on a property. The 
improvement value constitutes the residual value linking the sale price and the land 
valuation. In other words, sale price minus improvement residual equals land value.
In mass appraisal or assessment, these processes translate into many assessments. 
Through annual roll quality enhancement and uniformity analysis we routinely audit and 
verify our property information and our mass appraisal models.
Mass Appraisal Model is the process of adjusting mass appraisal formulas,
tables and rate schedules to the current market. For land valuation, these tables contain 
land values per unit (typically acres for the Gulf Islands), along with adjustments for size 
and other locational features (namely topography, view, and directional orientation). In 
this past year, our office conducted a recalibration of land size adjustment factors 
through a loglinear regression using sales data. This review is a necessary process to 
make certain the land dimension factors exhibit a correlation to the market data 
analysed annually ensuring acceptable uniformity in the assessment roll against 
international standards.

2014 Acreage Sales — Gulf Islands
The graph below includes all single family residential, acreage and vacant residential 
sales for the Gulf Islands. The data shows a normal distribution based on international 
ratio standards. Internationally recognized measures of quality are the assessment to 
sale ratio (ASR) and the coefficient of dispersion (COD). The median ASR for the Gulf

Islands is 97.63. The median is midpoint of the sales population with half of the sales 

being above the median and half of the sales being below the median. For residential 

properties, BCA's standard for the ASR is between 97 and 100 exceeding the 

international standard of between 90 and 110. The COD for the Gulf Islands is 13.25. 

The COD is the most utilized measure of uniformity in ratio studies and is based on the 

average absolute deviation from the median ASR expressed as a percentage. For 

residential properties, BCA's standard for the COD is < 15. A COD of 15 or less for a 

heterogeneous region is associated with good uniformity.

2014 Acreage Sales - Mayne/Saturna

The graph below includes sales from Mayne and Saturna Islands only. The distribution 

is normal but the median ASR is 93.18 indicating the assessments are slightly below the 

standard. This is primarily due to the higher valued properties all trending at or below 

100 in the distribution. The COD is 10.29 which again is associated with good 

uniformity.

Sales Volumes 
The tables below summarize volumes of sales for 2011 through 2014. As can be seen, 
the overall sale volume for 2014 is at or above the previous years indicating there is no 
observable impairment on demand levels in the market.

 Sales Volumes - Gulf Islands
          Single Family Residential  Acreage     Vacant Residential Total
  2014              204                 89              53           346
  2013              159                 59              42           260
  2012              136                 66              35           237
  2011              138                 43              37           218

 Sales Volumes - Mayne Island
          Single Family Residential  Acreage     Vacant Residential Total
  2014              24                  1                6           31
  2013              19                  2                9           30
  2012              16                  1                3           20
  2011              15                  2                6           23

 Sales Volumes - Saturna Island
          Single Family Residential  Acreage     Vacant Residential Total
  2014               4                  2                1            7
  2013               3                  -                2            5
  2012               1                  2                1            4
  2011               5                  -                2            7

Listings 
Below is a table of listings for Mayne and Saturna Islands. Of the 15 properties listed 
July 2014, 4 are listed below the 2015 Roll value. This is presented to provide a 
perspective on listing prices in relation to assessment levels only as a benchmark. The 
data below indicates good alignment.

Mayne Island Listings

                                                                                Listing          Listing
          Roll #             Address                MLS #         Acres         Jan-15         . Jul-14        Assessment
       05752050             560 Waugh             V1089570          9.9       $249,900               -            $237,000
 *     05212000        392 Campbell Bay            V996316         8.13       $279,000         $279,000           $269,000
       05752060             550 Waugh             V1089559         48.43      $350,000               -            $394,000
       05142260          332 Deacon Hill           V991312         10.01      $479,000               -            $383,900
       05046100             640 Purcell           V1045486         13.79      $699,500         $699,500           $951,000
       05142270          308 Deacon Hill          V1078306           10       $898,000               -            $647,000
  *    05563090             445 Garrick           V1032911         28.4       $960,000         $960,000           $335,000
       05142430          382 Deacon Hill           V884969           10      $1,200,000       $1,200,000          $965,000
 **    05207000        378 Campbell Bay           V1039717        143.29     $1,799,000       $1,799,000          $220,803
       05142160            467 Heck Hill            314330         10.39      $719,000         $719,000           $484,000
       05142170            414 Heck Hill            344176         10.01      $997,000               -            $691,000
       05141000        631 Gallagher Bay            344223         25.24     $1,100,000              -            $523,000
 **    05202000             540 Fernhill            325511         20.1      $1,180,000       $1,485,000          $679,647

* Vacant
** Farm

Saturna Island Listings 
                                                                                   Listing         Listing
      Roll #           Address                      MLS #             Acres        Jan-15          Jul-14         Assessment
       07068001        652 Tumbo Channel            V1097332          8.18       $499,000         $499,000           $500,000
 *     07253130        Lot 12 Gaines Rd               335609          13.2       $229,950         $229,950           $270,000.

* Vacant

Resold Properties
There are a total of 44 properties which have sold and resold between January 2010 
and January 2015 in the Gulf Islands. Of these, 2 are on Mayne Island and there are no 
resold properties on Saturna Island. The 2 resold properties for Mayne Island indicate 
there is marginal positive change over this time period.

Market Trend 
As detailed earlier, assessments are based on sales transactions which is reported 
annually to property owners. For the outer Gulf Islands, many purchasers are off island 
which is intrinsic to that market. As a result the real estate market typically exhibits a 
lower volume of sale transactions and market changes or corrections tend to be slower 
to develop as was witnessed after the 2008 financial market difficulties. We have 
however noted a deflationary trend in the Magic Lake properties on Pender Island. This 
is believed to be the result of a saturation of small lots which is impacting that market.

Conclusion 
A Mass Appraisal Model recalibration occurred in 2014. This was required to address 
land valuation for larger properties where a gap existed between sale indications and 
the assessments. This has resulted in instances where the assessment trend for 
property owners of larger acreage differs from the general trend, It is part of BGA's 
normal practice to annually undertake assessment reviews, audits and quality 
enhancement initiatives. The actions as a result may cause shifts in values, however it 
is the market value as of July 1 that must be estimated in accordance to the 
Assessment Act. In December 2014, courtesy notification letters were delivered to 
property owners with notable changes on their 2015 Assessments and they were invited 
to contact us to obtain further information and rationale for the change.
As can be seen from the data presented here, the assessments for Mayne and Saturna 
Islands are within international standards for mass appraisal and exhibit good 
uniformity. We are committed to monitoring the real estate market through the analysis 
of sales as well as other market influences and report those findings on the assessment
roll each year.

Should your members continue to have concerns with their 2015 property assessments,  
they may choose to file a 2015 Notice of Complaint (Appeal). The deadline to file an 
Appeal is February 2, 2015. Information on how to file an Appeal is included on the  
assessment notice or at www.bcassessment.ca.
I invite you to contact me or meet with me in person to discuss and review this 
information in detail.

Sincerely,

Greg Wood
Deputy Assessor, Capital Region

cc: Reuben Danakody
 Regional Assessor, Capital Region