Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 8, 2015

FILE NO.: WR 132587

Assessed Person(s): Mary Diane Simpson

Appellant(s): Mary Diane Simpson

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 24 Downing Street

Municipality(ies): City of Toronto

Roll Number(s): 1919-031-320-03700-0000

Appeal Number(s): 3061310

Taxation Year(s): 2015

Hearing Event No.: 574070

Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: May 22, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel/Representative
M. D. Simpson	Self-represented
MPAC	B. Rondelli
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a one-and-one-half storey single family detached residential property located at 24 Downing Street, Toronto.

2The subject property is situated on a lot with a frontage of 50 feet and a depth of 200 feet or an area of 10,000 square feet.

3The building was originally constructed in 1950 and was renovated in 1990 thereby having an effective year built of 1976.

4The total building area is 1,033 square feet.

5The subject property has a finished basement area of 525 square feet.

6The assessment of the subject property for the taxation year 2015 is $618,000.

7The Appellant argues that MPAC has over assessed her property and believes that the assessment is excessive in relation to similar properties in the neighbourhood.

ISSUE

8The issue before the Assessment Review Board (“Board”) is to determine whether the subject property has been incorrectly assessed.

DECISION

9The Board finds that the current value of the subject property for the 2015 taxation year is $544,000 (rounded).

10The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Assessment Act, R. S. O. 1990, cA.31, as amended (“Act”).

11Accordingly, the Board reduces the assessment of the subject property from $618,000 to $544,000 (rounded) for the 2015 taxation year.

REASONS FOR DECISION

The Legislation

12For the 2013 taxation year, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

13Section 1 of the Act defines “current value” as:

“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.

14Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

15Section 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:

2. For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.

3. 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.

16Section 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.

17Section 40.(17) of the Act states:

40.(17) Burden of proof. – For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

18Section 40.(19) of the Act states:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

Analysis

19Under the Act the Board is required to do three things:

(1) Find the current value of the property;

(2) Make reference to the value at which similar lands in the vicinity are assessed; and

(3) Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

20The best measure of current value is an arm’s length and market tested sale of the subject property on the valuation date of January 1, 2012, or close to it. If no such transaction took place, a further measure of current value is arm’s length and market tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property. The onus for establishing the correctness of the current value lies with MPAC.

MPAC’s Evidence

21MPAC provided five suggested comparable properties as shown in Table 1.

Table 1 MPAC’s Suggested Comparable Properties

Address	Bldg. Area (sq. ft.)	Lot Size (sq. ft.)	Effective Year Built	Sale Amt.	Sale Date
24 Downing Street (subject property)	1,033	10,000	1976
31 Downing Street	1,138	7,500	1976	$600,000	Nov. 2012
3955 Bloor Street, West	1,186	7,424	1976	$498,000	June 2010
3951 Bloor Street, West	1,166	7,424	1976	$512,000	March 2011
50 Wilmar Road	1,202	6,500	1975	$600,000	July 2010
27 Acorn Avenue	1,018	5,040	1975	$485,000	Jan. 2012

22The Assessor contends that the above five suggested properties in the vicinity of the subject property are comparable properties for the following reasons:

i. The properties are all located in the same neighbourhood;

ii. The properties are of similar building size, and age.

iii. The properties have all had Code “B” renovations done in the same year bringing their effective year built to 1975 or 1976.

iv. All the properties have similar quality class rating (5.5 or 6.0).

23The Assessor informed the Board that in her opinion the suggested comparable properties she provided while considered comparable to the subject property have features that make them inferior to the subject property. She stated that the property located at 31 Downing Street has a negative 4% adjustment applied to its current value because the property is subjected to light traffic pattern and the properties at 3955 Bloor Street West, and 3951 Bloor Street West have a negative 8% applied to their property values because of heavy traffic patterns. She also indicated that the property at 27 Acorn has a negative 8% applied to its current value because it abuts a hydro corridor.

24The Assessor pointed out that the property at 50 Wilmar Road is considered most comparable to the subject property and was sold in July 2010 for $600,000 and has a time adjusted sale amount of $669,101.

25The Assessor stated that on the basis of her analysis the suggested comparable at 50 Wilmar Road is most similar to the subject to property yet the assessment of the subject property at $618,000 is lower than the time adjusted sale price of 50 Wilmar Road at $669,101. She believes that this indicates that the current value of the subject property is below market value. She concludes that assessment of the subject property at $618,000 is reasonable.

26MPAC also submitted in Appendix 8 and 9 “Comparable Property Reports” for all of the suggested comparable properties submitted by the Appellant.

Appellant’s Evidence

27The Appellant submitted the following documents:

i. Exhibit 2 is a discrepancy analysis between MPAC’s Property Assessment Report compared to the Toronto Property System Report.

ii. Exhibit 3 contains an analysis prepared by the Appellant to establish the property value of the subject property. It also includes excerpts and a cover letter from J.T. Bowes Appraisal Corp.

iii. Exhibit 4 is a list of suggested comparable properties submitted by the Appellant.

iv. Exhibit 5 is a map and the “Comparable Property Report” pertaining to MPAC’s suggested comparable properties.

v. Exhibit 6 is “My Neighbourhood Sales” report of sales of various properties in the general vicinity and neighbourhood of the subject property. The Appellant informed the Board that the properties listed in this exhibit are not being submitted as suggested comparable properties but rather to demonstrate the sales trend for properties in the neighbourhood of the subject property.

vi. Exhibit 7 is a copy of the “Property Assessment Details” report as well as a copy of “Your Property Profile” pertaining to the subject property.

Analysis of Evidence

Analysis of MPAC’s Evidence

28The Board has reviewed the property details pertaining to the five suggested comparable properties. The Board accepts the property located at 31 Downing Street as comparable to the subject property because it is located on the same street as the subject property and it is similar in age, building size, lot size and quality class. This property has a negative 4% adjustment on its assessment for light traffic. This property has a valid sale. The Board rejects the suggested comparable property at 3951 Bloor Street West since unlike the subject property, it is located in a heavy traffic area. The Board also reject the property located at 27 Acorn Avenue because unlike the subject property, it abuts a hydro corridor and has a lot that is one half the size of the subject property. The Board rejects the property located at 3955 Bloor Street West because in addition to being subjected to heavy traffic patterns the sale of this property in 2010 is considered too far removed from the valuation date of January 1, 2012. The Board similarly rejects the property at 50 Wilmar Road because its sale in 2010 is considered too far removed from the valuation date of January 1, 2012.

Analysis of Appellant’s Evidence

29The Appellant drew the Board’s attention to Exhibit 2 to show a discrepancy in her assessment. She pointed to the MPAC Property Assessment Notice for the 2013 – 2016 property tax years and the Toronto Property System Report (City of Toronto) for the subject property which shows a discrepancy of $4,000 increase in the 2008 current value of the subject property. The Appellant stated that she was advised by MPAC that the $4,000 increase in her assessment was to account for a larger finished basement area than was originally documented. The Appellant expressed concern about the change in square footage since she stated that there have been no recent renovations to her basement and MPAC had not undertaken an inspection in recent years to establish an increase in the basement area. The Assessor stated that she did not have any information on how the change was established but stated that MPAC does “walkabouts” in neighbourhoods at which time changes are noted and adjustments to assessments are made. She stated that MPAC was willing to do an internal inspection to verify the square footage as stated in the Property Profile. The Board accepts the square footage as presented by MPAC since the Appellant was unable to refute MPAC’s evidence.

30The Appellant’s claim that the increase in the assessment of the subject property in the 2008 valuation period by $4,000 is incorrect and that this error was carried forward to the 2012 valuation period. The Appellant states that the increase of $31,250 in the assessment for the 2012 valuation period includes an amount of $4,000 (discussed above) that should not have been carried forward. She claims that if the $4,000 was not applied, it would have resulted in an increase of $27,250 rather than $31,250. The Board rejects the Appellant’s argument for an adjustment based on the $4,000 increase because the 2012 valuation is not premised on the previous valuation period and therefore has no impact on the current valuation period of 2012.

31The Appellant in Exhibit 3 submitted two suggested comparable properties located at 10 Statler Avenue and 33 Shaver Avenue North which were derived from the Appraisal Report done by J.T. Bowes Appraisal Corporation. The Board rejects the property located at 10 Statler Avenue because it was unable to establish the accuracy of the building size at the time of sale since a new larger building was constructed on the site in 2012. In addition the Appraisal Report provides only an approximate building area which could not be verified. The Board also rejects the property located at 33 Shaver Avenue since the Assessor pointed out that this is not comparable to the subject property since the building on this property was constructed using urea formaldehyde which impacts on its value.

32The Board reviewed the list of suggested comparable properties submitted by the Appellant in Exhibit 4. The Board rejected all of the suggested comparable properties is Exhibit 4 since six of the seven suggested comparable properties do not have valid sales and the one remaining property located at 33 Shaver Avenue is constructed using urea formaldehyde and is therefore not comparable to the subject property.

33The Board notes Exhibit 6 provided by the Appellant which was submitted to show sales trends in the area only and not intended for use as comparable properties to the subject property.

Board’s Analysis

34The Board finds that the suggested comparable property submitted by MPAC at 31 Downing Street (located on the same street as the subject property) having a valid sale is similar to the subject property in age, building size, lot size and quality class and therefore suitable for determining the current value of the subject property. The details are shown in Table 2.

Table 2 Subject Property and Comparable Property

Address	Bldg. Area (sq. ft.)	Lot Size (sq. ft.)	Effective Year Built	Sale Amt.	Sale Date
24 Downing Street (subject property)	1,033	10,000	1976
31 Downing Street	1,138	7,500	1976	$600,000	Nov. 2012

35The Board reviewed Exhibit 3 which was presented in two parts. The first is an analysis conducted by the Appellant to establish what, in her view, is the current value of the subject property and the second part is an extract from a report of an appraisal prepared by J.T. Bowes Appraisal Corp. The Board is unable to rely on the evidence presented in Exhibit 3 because the analysis, as stated previously, is inconsistent with the methodology envisaged in the legislation and the appraisal report is incomplete and the Appraiser was not present to be cross-examined on its content.

Determination of Current Value

36The Board agrees that the best method to determine the current value of the subject property is based on the sales of similar properties in the neighborhood.

37The Board, having accepted the property at 31 Downing Street as being comparable to the subject property and having a valid sale, finds that the sale price per square foot is $527.00. When this is applied to the subject property, it results in a current value of $544,391.

38The Board finds that the current value of the subject property is $544,000 (rounded).

Equity with Similar Lands in the Vicinity

39The Board is required under s. 44.(3) sub-paragraph (b) of the Act, to 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.

40For purposes of establishing equity, properties do not need to be comparable; they need to be of a similar nature and within a reasonable proximity. MPAC presented the sales of 30 properties within 0.28 kilometres of the subject property which occurred between 2010 and December 2012. For the purpose of establishing equity the Board considers the sales between January 2011 and December 2012 as valid sales. There are 23 sales within this period. The average Assessment to Sales Ratio (“ASR”) of the 23 valid sales is 0.99. The Board also examined the ASR of the 14 properties in Exhibit 6 presented by the Appellant to provide a gauge of sales in the area. The Board finds that 5 of the 14 properties have valid sales. The average ASR of these five properties at 0.99 is consistent with the average of the 23 provided by MPAC. A value within five percentage points is usually considered an acceptable value. In this case the average ASR of 0.99 falls within an acceptable range and suggests that MPAC’s methodology may be producing assessments in line with sales. The Board therefore finds that no adjustment is required for equity in accordance with s. 44.(3) (b) of the Act.

CONCLUSION

41The Board finds that the current value of the subject property for the 2015 taxation year is $544,000 (rounded).

42The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

43Accordingly, the Board reduces the assessment of the subject property from $618,000 to $544,000 (rounded) for the 2015 taxation year.

Footnotes

1. 1Subsection 5 permits the Minister to prescribe a different valuation day. A different day has not been prescribed.