Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
June 11, 2015
WR 130886
Assessed Person(s):
Catherine Lynn Simpson
Appellant(s):
Catherine Lynn Simpson
Respondent(s):
The Municipal Property Assessment Corporation (“MPAC”) Region 9
Respondent(s):
City of Toronto
Property Location(s):
181 Glencairn Avenue
Municipality(ies):
City of Toronto
Roll Number(s):
1904-115-270-01500-0000
Appeal Number(s):
3046855 and 3075526 (deemed 2015)
Taxation Year(s):
2014 (and deemed 2015)
Hearing Event No.
570142
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: February 11, 2015 in Toronto, Ontario
APPEARANCES:
Parties
Counsel^+/Representative
Catherine Lynn Simpson
Daniel Attard
MPAC
Tyler Nastich
City of Toronto
No one appeared
DECISION OF THE BOARD DELIVERED BY SANDRA DRIESEL AND MARK SPRAGGETT
INTRODUCTION
1The Assessed Person/Appellant is represented by Daniel Attard (“Mr. Attard”) of Attard Property Tax Services and Andrew Attard (“Andrew Attard”) appears as witness for the Appellant. Tyler Nastich represents MPAC.
2MPAC reports the subject property is a single detached house located at 181 Glencairn Avenue in the City of Toronto. It was built in 2006. The building total area (“BTA”) for this three-storey home is 6,115 square feet. It has a finished basement area of 2,417 square feet. The site has an effective area of 17,750 square feet. The property includes a detached garage, carport and an outdoor pool. The property receives a -2.00% adjustment for abutting light traffic an -6.00% neighbourhood adjustment. There is a +40.00% adjustment on this property referenced as “Market (not otherwise defined)”. Mr. Nastich explains that this adjustment was added to adjust for the fact that the subject building is newer than most in the neighbourhood. Mr. Attard agreed with the description of the property as submitted.
3Mr. Nastich reports that as a result of his inspection of the subject property he determined that there should be a change in the “quality code” from 9.5 to a lower 9.0. This change resulted in a reduction of the current value assessment (“CVA”) as returned on the roll from $5,825,000 to $5,200,000 and he delivered this new value as a settlement offer to Mr. Attard.
4On January 22, 2015, Mr. Nastich received an email transmission from Sheryl Murie of Attard Property Tax Services stating that they have advised their client that they are accepting MPAC’s offer to reduce the CVA to $5,200,000 (Exhibit 1). Mr. Nastich states he was therefore ‘upset’ when Mr. Attard later informed him that he had decided to reject the offer to settle and would continue with the scheduled hearing event. He adds that although Mr. Attard’s submissions were only disclosed to him two days prior to the hearing, he was prepared for the hearing event to proceed.
5Mr. Nastich submits that his analysis of sales of suggested comparable properties supports MPAC’s opinion that $5,200,000 for the subject property is reasonable and correct.
6Mr. Nastich concludes an equity analysis that supports his opinion that MPAC is equitable assessing the properties in the vicinity.
7The Appellant challenges MPAC’s recommended CVA claiming a further reduction is warranted. He completed his own analysis based on the sales of suggested comparable properties and concludes that a more correct CVA would be approximately $4,040,000.
8The Appellant provided an equity analysis. He submits that an equity adjustment is only required if the Board accepts MPAC’s opinion of a correct current value as he finds his opinion of value is equitable when compared to properties in the vicinity.
ISSUES
9The first issue before the Board is to find a correct current value for the subject property for the 2014 and deemed 2015 taxation years that is equitable with the assessments of similar lands in the vicinity.
10The Appellant raised an issue regarding the +40% adjustment on the subject property. He argues that this unexplained market adjustment, unique to the subject CVA unjustifiably inflates the value of the subject property. He has calculated that if this adjustment is removed, the CVA would be approximately $3.5 K.
DECISION
11The Board finds that the current value of the subject property is $5,200,000 for the 2014 and deemed 2015 taxation years.
12The Board finds that there is no evidence to support a finding that the assessment of the subject property should be reduced below the current value to make it equitable with the assessments of similar properties in the vicinity.
13The decision of the Board is to reduce the assessment from $5,825,000 to $5,200,000 for the 2014 and deemed 2015 taxation years.
REASONS FOR DECISION
The Legislation
14The Board is directed by the following sections of the Assessment Act (“Act”):
15Section 19.(1) of the Act states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
16Current value is defined in section 1:
“current value” means, in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.
17Section 19.2(1)2 of the Act states:
19.2(1) Valuation days. – Subject to subsection (5)1, the day as of which land is valued for a taxation year is determined as follows:
For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.
For each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.
18Section 44.(3) of the Act states:
44.(3) Same, 2009 and subsequent years. – For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,
(a) determine the current value of the land; and
(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.
Regarding Section 44.(3)(a) – Current Value
19To determine a correct current value, the best evidence is an arm's length sale of the subject property on or near the valuation date of January 1, 2012. If there is no such transaction on the subject property, the Board looks to the sales of similar properties in the vicinity to determine if the sales evidence suggests that a current value requires correction. For the Board's purposes, "similar" relates to design, size, age, amenities, condition, construction and so forth.
20With no current sale on the subject property, the Board looked to the sales of suggested comparable properties submitted in evidence.
21To support MPAC’s opinion of a correct current value Mr. Nastich submitted a Valuation Report (Exhibit 2), ' Appendix A: Market Analysis' report (Exhibit 3) and photographs of his suggested comparable properties (Exhibit 4). He focused on the Market Analysis that contained details of his suggested comparable properties with sales ranging from October 2011 to October 2012 that had been time adjusted to the valuation date of January 2012. To support these time adjusted sales (“TAS”) Mr. Nastich explained time adjustment factors (“TAFs'") used by MPAC. The Appellant had no issue with the TAF’s used by MPAC.
22Mr. Nastich notes that in order to find a suitable number of comparable properties he had to look outside of the subject property homogeneous neighbourhood. He submits that his suggested comparables properties include some that are superior to the subject, some will be relatively comparable, and some will be inferior to the subject. The TAS on the 'Market Analysis' ranges from $3,357,150 - $5,917,146. He concludes that the subject property falls within the range of these sales and therefore a current value of $5,200,000 for the subject property is reasonable and is therefore "correct" in the context of s. 40.(17) of the Act.
23On review of the suggested comparable properties submitted by MPAC the Board considered two properties were not similar enough to be used as a comparable to determine a correct current value. The BTA is over 1,000 square foot different from the subject (6,115 square feet):
Sale A: The BTA (3,450) is 2,665 square feet smaller.
Sale B: The BTA (4,299) is 1,816 square feet smaller.
24The Board looked to the remaining suggested comparable properties to determine a correct current value for the subject property. See Tables 1 and 2 below.
25Andrew Attard a witness for the Appellant submitted a report to support his opinion of current value. This report (Exhibit 6) was included MPAC’s Property Assessment Details (“PAD”) report showing the +40% adjustment that he believes should be removed. Although he notes that the removal of this adjustment would lower the CVA on MPAC’s records to $3,495,000 he concludes that his report supports his opinion of value to be $4,040,000.
26Andrew Attard submitted details on eight suggested comparable properties he used to arrive at his opinion of value. Each property has sales from March 2011 to October 2013 that were time adjusted to a valuation date of January 2014. MPAC had no issue with the TAFs used by the Appellant. There were further adjustments to the sales values to compensate for differences in location and lot size (‘land’). Using the adjusted sales values, Andrew Attard calculated a value per square foot (the adjusted sale price divided by the total BTA) on each suggested comparable. He then determined the median value per square foot of the eight properties to be $661 and he applied this to the subject property BTA (6,115 square feet) to arrive at his opinion of current value, $4,040,000 (rounded).
27Regarding Andrew Attard’s approach to value of using a value per square foot the Board finds that in this case the suggested comparable properties are too dissimilar for this approach to value to be meaningful:
With the exception of Comparable Properties 1 and 8, the comparables are over 700 square foot smaller than the subject.
With the subject property having been built in 2006, excluding Comparable Properties 5, 6 and 7, the properties are 48 to 82 years older than the subject.
28The Board determined the TAFs used by the Appellant were reasonable and close to those used by MPAC. However, the Board is not convinced that a comparable property should require multiply adjustments to make it ‘similar’ to a subject property. If this were common practice any property could be used at random and adapted for comparison and this would be contrary to paragraph 19 above. Therefore given the above regarding the Appellants submissions the Board found none of the suggested comparables were similar enough to be useful in determining a correct current value.
29The Board then looked at those comparable properties found to be similar enough to the subject to determine a correct current value and compared their TAJ Sales Amounts to the subject CVA of $5,200,000. First, Table 1 (below) looks at a comparison by BTA and then, concerned about the differences in lot sizes, Table 2 (below) looks at a comparison by “site area”.
Table 1: CVA Comparison Based on a Range of BTA
Reference
Address
Year Built
Site Area
BTA
Adjusted Sale
MPAC CVA
C
29 Blythe Hill
2005
17,200.0
6,559
5,917,146
H
9 Royal Oak
2006
14,758.1
6,508
4,453,524
G
88 Plymbridge
2006
22,082.0
6,463
5,639,062
D
24 Blythedale
2003
12,852.0
6,276
5,165,337
E
458 Blythwood
2007
30,897.0
6,254
5,916,942
Subject
181 Glencairn
2006
17,750.0
6,115
5,200,000
F
29 Bayview Wood
2011
10,000.0
5,469
5,884,900
30From the above the Board finds that the CVA of the subject is within an acceptable range of the adjusted sales values of similar properties. From this, the Board does not find that the subject property is over-assessed at $5,200,000.
Table 2: CVA Comparison Based on a Range of Site Area
Reference
Address
Year Built
Site Area
BTA
TAJ Sale Amount
Subject CVA
E
458 Blythwood
2007
30,897.0
6,254
5,916,942
G
88 Plymbridge
2006
22,082.0
6,463
5,639,062
Subject
181 Glencairn
2006
17,750.0
6,115
5,200,000
C
29 Blythe Hill
2005
17,200.0
6,559
5,917,146
H
9 Royal Oak
2006
14,758.1
6,508
4,453,524
D
24 Blythedale
2003
12,852.0
6,276
5,165,337
F
29 Bayview Wood
2011
10,000.0
5,469
5,884,900
31The Board finds from the above that a CVA of $5,200,000 falls in an acceptable range of adjusted sales values of similar properties with much larger or smaller lot sizes. From this, the Board does not find that the subject is over-assessed at $5,200,000.
32The Board finds that the Appellant’s approach to value results in a less than reasonable suggested CVA ($4,040,000) as the properties used to in his calculations are too dissimilar. Also, in reference to the comparisons above (Table 1 and Table 2) the Appellant’s suggested CVA would be below the range of the similar properties.
33In conclusion, the Board finds that $5,200,000 is a correct current value.
Regarding Section 44.(3)(b) – Equity
34The Board having determined current value, is then required to have reference to the assessment of similar properties in the vicinity and to reduce the assessment of the subject property, if required, to make it equitable with their assessments. The Board's task is not to determine the overall accuracy of MPAC's model, but to determine how it has performed with regard to similar property in the vicinity.
35The Appellant submitted an equity report (Exhibit 7) with the ASR of the eight suggested comparable properties that were submitted by MPAC (Exhibit 3). From the above review of the submissions by MPAC the Board had already found:
72 Alexander & 124 Glencairn Ave are dissimilar to the subject.
The remaining properties were outside of the subject neighbourhood (which the Board accepts when determining a correct current value in order to find a sampling of similar properties).
In view of this, the Board finds that the Appellant’s report does not satisfy the test of “similar lands in the vicinity”.
36MPAC submitted an Equity Analysis (Exhibit 5) of the Assessment to Sale Ratio (ASR) of 30 properties. The Board finds that this analysis is lacking details that would enable the Board to find these properties to be ‘similar’ to the subject.
37Accordingly the Board finds that there is no evidence before it that might lead to an adjustment under s. 44.(3)(b).
Regarding the Appellant’s Issue: +40% Adjustment included in the subject CVA
38The Appellant raised the issue that this adjustment included in the PAD is unsubstantiated and should be removed. He did submit however that the removal of the total adjustment would lower the CVA to a value that would be too minimal.
39Mr. Nastich explained that this adjustment was necessary because the subject property is much newer than most of the properties in the area.
40Based on the above comparisons made in Table 1 and Table 2 (that include this adjustment) the Board finds that this adjustment does not unfairly influence the CVA of the subject property (which has been determined by the Board to be correct).
CONCLUSION
41For the reasons set out above, the Board finds the current value of 181 Glencairn Avenue to be $5,200,000.
2015 DEEMED APPEAL
42An appeal for the 2014 taxation year is presently before the Board. Section 40.(26) provides that the Appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2014appeal before March 31, 2015. For that reason, this decision also applies to the 2015taxation year.
43Section 40.(26) of the Act directs:
Deemed appeals, 2009 and subsequent years
For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,
(a) in relation to the assessments under sections 32, 33 and 34 for the year; and
(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.
“Sandra Driesel”
SANDRA DRIESEL
MEMBER
“Mark Spraggett”
MARK SPRAGGETT
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248