By now Calgarians will have received their 2010 property tax assessments, with two-thirds experiencing a drop in their assessed values. While most won’t complain about a lower tax bill, many will be surprised to see the value the city has deemed their property.

It is important to remember that assessed values stem from July 1st 2009, which was largely prior to the rebound values experienced in the later parts of 2009. With that said, according to city assessors the typical home value dropped by 13 per cent.

City house values have been up and down over the past few years for certain. The median single family house value used for the assessments was $374,000, down from $427,000 at the same point the year before. In December 2009 the median single family house value had increased to $401,000, an upward trend homeowners would like to see continued.

So if you already own a home and house values decrease, what does that mean for your mortgage? For most Calgarians this blip downward will have little affect, especially if you are currently in a mortgage term with no intention of making adjustments over the next short while. As long as the mortgage payments continue to be made on time, then the lender is happy and you are secure in your mortgage previously negotiated. When your mortgage term is complete, you can evaluate your options between staying with your current lender or switching to a new one without penalty —#8212; property values at that time will factor into the decision.

But what about those owners looking to make adjustments to their mortgage or possibly make a move? Keep in mind the city assessment is not the be all and end all of property value. Lenders will refer to recent sales activity in your area to determine the current value of your property, not what it may have been priced at in July of last year. Yes, property assessments can factor in, but recent appraisals will hold significant weight as well. A home’s value is reflected in what others are paying in your community today, not six months ago.

Depending on when you got into the real estate market, and how much down payment you contributed, your mortgage balance could be close, or even exceed, the value your latest assessment has assigned. Buyers who bought in 2006 and 2007 purchased during a time of dramatic increases in Calgary values. Property values reduced in 2008 and have been on the rebound since mid 2009.

If you are planning to move, you will want to consider carefully your current property value in relation to your mortgage balance, mortgage payout penalties (if applicable) and real estate commissions. If you are in the position where your property value is close to your mortgage balance, then you could find yourself in a negative situation upon selling, meaning you would have to come up with the short fall out of your own pocket.

Does that mean that you can’t move right now? Not necessarily. Many homeowners may be surprised to learn they are in a position to move up and rent out their existing house while still qualifying for both. Some lenders will allow borrowers to use up to 80 per cent of rental income as qualifying income over and above that of employment income when looking to arrange a new mortgage. So if you want to make a move, but are feeling a little stuck based on the current property values this option is well worth exploring.

The bottom line is that Calgary’s property values are reduced from a highly escalated time in our city’s history. But it is important to note there are many options when dealing with mortgage financing and your city of Calgary assessment is only a starting point when it comes to value.

If you want to make some changes in 2010, then talk to an experienced mortgage professional so you can get a handle on what is truly available to you. Don’t make assumptions here, but do feel good if it means a little less tax money going out the door in 2010!

— Sharon Essington is an Accredited Mortgage Professional with Verico Canada Mortgage Direct. Sharon specializes in providing a creative approach to mortgage financing for individuals looking to take advantage of the current opportunity market.

For more information on this topic, or to discuss your individual mortgage needs, please call 403.239.8250.