Fair Market Value

Understand fair market value in Canadian real estate, how it's calculated, when it's used, and why it's vital for pricing, taxes, and lending decisions.

Fair Market Value

May 30, 2025


What is Fair Market Value?

Fair market value (FMV) is the price a property would sell for in an open and competitive market, where both buyer and seller act knowledgeably and without pressure.

Why Does Fair Market Value Matter in Real Estate?

In Canadian real estate, FMV is a cornerstone for appraisals, taxation, insurance, and legal disputes.



Fair market value is used for:



FMV is usually determined by certified appraisers using comparable sales (comps), market trends, and property condition.

Example of Fair Market Value in Action

An appraiser sets the fair market value of a detached home at $720,000 based on recent comparable sales in the same neighbourhood.

Key Takeaways

  • Reflects open market sale price.
  • Used for taxes, lending, and pricing.
  • Based on comps and market data.
  • Determined by certified appraisers.
  • Key to fair and legal property valuation.

Related Terms

Additional Terms

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