Most properties are assessed at fair market value, which is determined by reviewing the assessment of other similar properties in a municipality. For some properties, it is difficult to assess the property at fair market value due to the lack of any similar property in the municipality or surrounding areas.
In 2006 there was a legislative amendment made to help deal with assessments for properties with limited comparable markets. The amendment allowed for these properties to be assessed at reproduction cost, which is the cost of reproducing the entire physical property, less depreciation. In 2011 the Supreme Court of Newfoundland and Labrador ruled that the legislation was not clear as to which properties were to be assessed by reproduction method.
In response, a list was compiled of all properties which should be assessed in this manner. This list was enacted under the Assessment Act, 2006 as Special Purpose Property Regulations.
This legislative amendment was challenged and the Supreme Court again found that the development of such a list could lead to unequal treatment of property owners.
Since the latest court decision the Special Purpose Properties Regulations have not been used and the assessment agencies have assessed these properties using fair market value.