Appraisal vs assessment vs AVM: why your home has three values
An appraisal is a qualified appraiser's opinion of your home's market value on a specific date, usually ordered by a lender and paid for by you. An assessment is the value your municipality or provincial assessor uses to share out property tax, often based on a date months or years ago (Ontario still uses January 1, 2016). An AVM is a computer estimate from sales data. Lenders lend on the appraisal, sometimes on an AVM, and never on the assessment alone.
The three side by side
| Appraisal | Assessment | AVM | |
|---|---|---|---|
| Who makes it | A designated appraiser (AIC: AACI or CRA) | Municipal or provincial assessor (MPAC, BC Assessment, PVSC…) | Software, from sales and property data |
| Purpose | Market value for a lender or a decision | Share property tax fairly | Quick estimate (lenders, portals) |
| Value as of | The inspection date | A set valuation date (ON Jan 1, 2016; BC July 1 last year) | Recent data, varies |
| Sees inside? | Usually yes | Rarely | No |
| Who pays | You, for a lender's report (AIC) | Taxes fund it | Free or lender cost |
| Can you challenge it? | Ask the lender to reconsider; AIC complaint on standards only | Yes, a formal appeal with deadlines | No formal process |
Appraisal
The Appraisal Institute of Canada says an AIC-designated appraiser offers an unbiased opinion of value, following the Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP). For residential homes of up to four units, the designation is the CRA (Canadian Residential Appraiser); the AACI covers all property types. Appraisers use the direct comparison approach (recent similar sales) and, where useful, the cost and income approaches.
For a mortgage, the lender is the appraiser's client and the homeowner pays the fee, according to the AIC. OSFI's Guideline B-20 expects third-party appraisers to be independent of the loan decision and properly designated, licensed or certified.
Assessment
Assessors value every property in their area as of one date, so tax can be shared fairly. The date matters: in Ontario, january 1, 2016 — still used for the 2026 tax year, so a home that sold for far more last year can carry a much lower assessment. An assessment is designed to be right relative to your neighbours, not to price your home today. Every province has a formal appeal: see appeals by province.
AVM (automated valuation)
An AVM estimates value statistically from sales and property records. OSFI's B-20 lets lenders use automated valuation tools but says they should not rely on any single method, should combine valuation tools, and should monitor how well the tools work; higher-risk loans (high loan-to-value, rapidly rising markets) call for a more thorough valuation. The Appraisal Institute argues for on-site appraisals rather than algorithms in lending decisions.
Which one matters for you
- Refinancing or a HELOC: the lender's appraisal (or AVM). Test what different appraisals would unlock in the equity calculator.
- Property tax: the assessment. Check the appeal calculator.
- Selling: neither: the market sets the price. A pre-listing appraisal can help you set expectations.
Frequently asked questions
Why is my assessment lower than my home's market value?
Assessments are pegged to a valuation date that can be well in the past (January 1, 2016 in Ontario; July 1 of last year in BC and Alberta), and they exist to share out tax, not to price your home for a sale or a loan.
Can a bank use my property assessment instead of an appraisal?
Not on its own. OSFI expects federally regulated lenders to use a combination of valuation tools and not rely on a single method; for higher-risk loans, a full appraisal is expected.
Are online home value estimates accurate?
They can be close for typical homes in active markets and far off for unusual ones. They don't see inside your home. Treat them as a starting point.
Primary sources
- Appraisal Institute of Canada — For residential property owners (who pays, CUSPAP). Checked .
- Appraisal Institute of Canada — What appraisers do (AACI, CRA designations; three approaches). Checked .
- OSFI — Guideline B-20: Residential mortgage underwriting (HELOC 65%, appraisals, AVMs) (effective October 31, 2017). Checked .
- CMHC — Your home value (appraisal shortfalls) (effective March 31, 2018). Checked .