Evan Hovius

The appellants appealed the current value assessments of two commercial properties on Bloor Street West for the 2017 to 2021 taxation years.

The parties agreed to use the direct income capitalization approach and agreed on most values, leaving only the fair market rent for ground-floor retail space in dispute.

The Assessment Review Board determined the fair market rent to be $305 per square foot, preferring the respondent's methodology for calculating net effective rent without discounting future rents to present value and without deducting the owner's portion of tenant improvement allowances.

The Board also rejected the appellants' argument that net effective rent should be reduced to account for unexpected property tax increases following the 2016 general reassessment.

The assessments were reduced accordingly.

The Appellants appealed the property tax assessments of industrial malls in Halton and Peel Regions for the 2013 to 2016 taxation years.

The central issue was the appropriate capitalization rate to apply to the net operating income of the properties.

MPAC had originally used a 7% capitalization rate but revised it to 6.6% for appealed properties after reducing fair market rents.

The Appellants argued the 6.6% rate was incorrect and inequitable compared to unappealed properties that remained at 7%.

The Assessment Review Board accepted MPAC's expert evidence supporting the 6.6% rate, finding that equity applies to the final assessed value rather than individual valuation components.

The Board concluded the 6.6% capitalization rate produced correct and equitable current values.