T. Jech

The applicants sought leave to appeal two decisions of the Assessment Review Board regarding the property tax assessment of parking lots and a development site in downtown Toronto.

The core issue was whether 'air rights' or development rights should be classified as 'land' or 'real property' under the Assessment Act, which would allow them to be classified as 'vacant land' or 'excess land' and taxed at a lower rate.

The Divisional Court found no serious debate that air rights are not land for the purposes of the Act, as they have no physical existence and are merely attributes of the land.

The applications for leave to appeal were dismissed.

The appellants appealed the classification of four surface parking lots in the City of Toronto for the taxation years 2001 through 2008.

The appellants argued that the 'air rights' above the parking lot surfaces should be classified in the Commercial Property Class, Vacant Land Subclass or Excess Land Subclass, as they have value, are capable of legal description, are severable, and assessable.

The Municipal Property Assessment Corporation (MPAC) classified the properties wholly in the Commercial Property Class, arguing that density potential is a restriction attached to the land, not land itself.

The Assessment Review Board found that neither the undeveloped air space above the property nor the air rights/development rights/density rights in the City of Toronto zoning by-law are 'land' within the meaning of the Assessment Act.

The Board confirmed the assessments and the classification of the properties in the Commercial Property Class.