Property Assessment

This section provides information for property owners on the determination of a market value for all real property in the province.  Property assessment forms the basis for the collection of provincial and municipal property taxes.

Property assessment refers to the determination of a market value for all real property, as defined by the Real Property Assessment Act and Real Property Assessment Act Regulations, on an annual basis. This value forms the basis for the collection of provincial and municipal property taxes.

What is my market value assessment?

All real property is assigned a market value assessment by professional property assessors employed by the Province. This value is initially set based on such factors as cost of construction and uniformity of property types and locations. This value may be adjusted annually to reflect increases in the market value of property in your area.

What is my taxable value assessment?

The taxable value assessment is the assessment used to determine annual property taxes.

Owner-occupied residential properties are eligible for the owner-occupied residential assessment program. This program serves to protect Islanders from significant year-over-year assessment increases by capping the taxable value assessment to increase in the Consumer Price Index (CPI), or 5%, whichever is lower. The taxable value assessment for owner-occupied residential properties for the current year is the prior year taxable value assessment increased by the change in the CPI for the prior year, to a maximum of 5%. Under the owner-occupied residential assessment program, the taxable value assessment will not exceed the market value assessment.

The taxable value assessment can also increase as a result of improvements made to your property.

For all property other than owner-occupied residential property, the taxable value assessment is the market value assessment.

What is owner-occupied residential property?

The definition of owner-occupied residential property changed effective January 1, 2025.

For taxation years up to and including December 31, 2024: Owner-occupied residential property is residential property that is:

• owned and occupied by the person; and
• not leased or rented, in whole or in part, to any other person during the calendar year.

For taxation years beginning January 1, 2025 and after: Owner-occupied residential property is residential property that is:

• owned and occupied by the person; and
• not leased or rented, in whole or in part, for periods of less than 30 days at any time during the calendar year.

This means that, beginning in 2025, longer-term rentals (30 days or more) of a section of the owner-occupied portion of a property may be permitted without disqualifying the property as owner-occupied, provided all other criteria are met (eg. the owner must still occupy a portion of the property). This allows for situations like long-term (30+day) room rentals to occur without disqualifying the property from the owner-occupied residential assessment program. For example,

Kevin and Luke own and reside in a home that they purchased last year. While the market value assessment has grown to $197,000, the owner-occupied residential assessment program protected them by limiting annual taxable value assessment increases to the lower of CPI and 5%. As a result, their current taxable value assessment is only $184,000. 

Kevin and Luke decide to rent a room in their home on a long-term basis in order to help out with the mortgage payments. They find a roommate and sign a twelve-month lease.

Because they continue to meet the definition of an owner-occupied residential property, Kevin and Luke’s home continues to meet the requirements of the owner-occupied residential assessment program and remains protected by limiting annual assessment increases to the lower of CPI and 5%.

Note that if any portion of the property is rented for less than 30 days (i.e. short-term rental), it will no longer qualify as an owner-occupied residential property. As a result, the property will be removed from the owner-occupied residential assessment program and the taxable value will be reset to the market value. For example:

Jayme and Mike own and reside in a home that they purchased 10 years ago. While the market value assessment has grown to $300,000, the owner-occupied residential assessment program protected them by limiting annual taxable value assessment increases to the lower of CPI and 5%. As a result, their current taxable value assessment is only $247,000. 

Jayme and Mike decide to rent their home on a nightly and weekly basis. After applying and meeting the requirements, they are approved as a licensed tourism establishment with Tourism PEI and begin renting their home on a short-term basis (less than 30 days). 

As a result, Jayme and Mike’s home no longer meets the requirements of the owner-occupied residential assessment program, and the taxable value assessment is reset to the market value assessment of $300,000, resulting in increased property taxes payable. They will also lose eligibility to the 2007 and 2024 owner-occupied residential property credits if they were previously eligible.

A property owner may reapply for the owner-occupied residential assessment program in the future if they discontinue short-term rentals and meet all eligibility requirements. However, the protection offered by the owner-occupied residential assessment program will only be from that point forward; the taxable value assessment will not revert back to the prior amount.

Please note that an owner-occupied residential property is a building or any part of a building that is used as a single dwelling accommodation. In-law suites, basement apartments, etc. that are self-contained are treated as separate properties and are not eligible for the owner-occupied residential assessment program and will be assessed at market value. 

Why is there a difference between my market value assessment and my taxable value assessment?

The market value assessment of your property may have increased annually based on economic factors and an analysis of sales activity for property in your area.

The taxable value assessment, however, increases annually based on the percentage increase in Consumer Price Index (CPI) for the prior year to a maximum of 5%. Under the owner-occupied residential assessment program, the taxable value assessment will not exceed the market value assessment.

Will the Taxable Value Assessment ever be equal to the Market Value Assessment?

When an owner occupied residential property is:

1) initially added to the assessment roll; or

2) when a property that exists on the assessment roll is conveyed to a new owner,

the Taxable Value Assessment can be set to be equal to the Market Value Assessment. The Taxable Value Assessment will also be equal to the Market Value Assessment if annual increases in CPI are equal to or are greater than annual market value adjustments. In this circumstance, the Taxable Value Assessment will not exceed the market value assessment.

What factors are considered in determining my property assessment?

The primary factors that determine the market value assessment of a property include:

• Location of the property
• Quality of the site
• Nature of any improvements
• Size, quality and condition of any structures on the property

• Demand and market activity in the area

   

Is the process for assessment of income producing properties different?

Owners of income producing properties may on occasion be requested to provide income information to allow for the proper assessment of the income producing property. In these cases the property owner will be asked to complete a Questionnaire on Income Producing Properties (727 Kb) form or a Verification of Purchase Information and Questionnaire on Income Producing Properties(663 Kb) form.

How do I find out what the property assessment value is for my property?

A property tax bill is mailed to property owners in May of each year. The Notice of Property Assessment is part of this bill and can be found on Page 3.

If you are a property owner and you do not receive a property tax bill in May, of each year please refer to Owner Name and Mailing Address used for Property Tax Bills or contact Taxation and Property Records at (902) 368-4070.

Property owners are responsible to ensure that they receive their annual property tax bill.

Find current details about your property tax on the Property Tax Balance Inquiry page.

What if I feel my property assessment value is not correct?

If you do not feel that your property assessment reflects the value of your property, please refer to the Property Assessment Referral and Appeal procedures or contact Taxation and Property Records at (902) 368-4070.

Does property assessment differ for a mobile/mini home?

Yes. If the mobile home is not affixed by foundation to the land it sits on it will be valued independently of the land. There will be a market value assessment assigned to the mobile/mini home and a separate market value assessment assigned to the land. In these cases two property tax bills are created – one for the mobile/mini home and one for the land.

Disclaimer:This page is prepared for information purposes only, and should not be considered a substitute for the applicable statutes. Should there be any conflict between the contents of this page and the statutes, the statutes shall prevail.