Alfred Kwinter v. Municipal Property Assessment Corporation, Region 9, 2015 CanLII 45097

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: July 23, 2015 FILE NO.: WR 132236

Assessed Person(s): Alfred Kwinter Appellant(s): Alfred Kwinter Respondent(s): Municipal Property Assessment Corporation, (“MPAC”) Region 9 Respondent(s): City of Toronto

Property Location(s): 30 Glenorchy Road Municipality(ies): City of Toronto Roll Number(s): 1908-081-980-05800-0000 Appeal Number(s): 3044542 and 3078682 (deemed 2015) Taxation Year(s): 2014 and deemed 2015 Hearing Event No. 573248

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

Heard: May 1, 2015 in Toronto, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Alfred Kwinter	D. Attard+
MPAC	C. Bassi
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY J.L. WALKER

INTRODUCTION

1The subject property, 30 Glenorchy Road is a two-storey dwelling that was newly built in 2013. The total area of the improvement is 6,073 square feet (“sf”) situated on a 12,319 sf lot. A 5% premium has been applied to the value for abutting a type 2 ravine. It has five bedrooms, four full bathrooms and two half-baths. The Municipal Property Assessment Corporation (“MPAC”) assigned the property a quality code 9.5 that was confirmed following an inspection. Carlo Bassi, Property Valuation Analyst for MPAC, asserts that this quality code sets it apart from properties in the immediate area. He defends the $4,727,000 assessment for the 2014 taxation year on this basis, supported by seven sales having property codes of 9, 9.5 and 10.

2Daniel Attard, Counsel for the Appellant, Alfred Kwinter, argues for a value which reflects the cost to build and the land value, adjusted to include the ravine premium. He argues that this is supported by a comparison with similar properties in the immediate vicinity, and submits that the correct value is $3,621,000.

DECISION

3The Board finds that the current value for 20 Glenorchy Road is $4,476,000 and that no further reduction is required to this value to make it equitable with the assessment of similar lands in the vicinity. The Board reduces the assessment from $4,727,000 to $4,476,000 for the 2014 and for the deemed 2015 taxation years.

REASONS FOR DECISION

The Legislation

4Section 19.(1) of the Assessment Act R.S.O. 1990, c. A.31, as amended (“Act”) provides that the assessment of land in Ontario is to be based on its current value, which is defined in s. 3 as “…the amount of money for the fee simple, of unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.”

5For the taxation years in dispute, the subject property was valued as of January 1, 2012 pursuant to s.19.2(1) of the Act. As it was not the subject of a sale, the Board examines sales of similar lands in the vicinity that transacted at or near this date.

6For the taxation years in dispute, s. 44.(3) of the Act requires that 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 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

7The burden of proof as to the correctness of the current value of the subject property rests with the assessment corporation under s. 40.(17) of the Act.

8Section 40.(19) provides that after hearing the evidence and the submissions of the parties, the Board will determine the matter.

9Section 40.(26)(b) provides that if an appeal is not finally disposed of before March 31, an appellant shall be deemed to have brought the same appeal for the property, in relation to the assessment, for a subsequent taxation year. In the present case, the 2014 appeal was before the Board on May 1, 2015. Accordingly, the Board’s decision is deemed to apply to the 2015 taxation year.

Current Value

10The Board determined that the current value of the subject property is $4,476,000, finding a rate per square foot (“psf) of $737 to be the best evidence before it of current value.

11The parties emphasize different factors in their approaches to value. Mr. Bassi emphasizes quality of construction in his submission, given that the subject property is a newly constructed home, arriving at current value on a comparison of sales psf of building. Mr. Attard submits that the best indicator of current value is the cost of construction plus the land value, adjusted for the ravine. He substantiates his value by comparison to properties in the immediate vicinity of the subject property, while Mr. Bassi’s search has gone further away from the subject property to capture properties of newer construction with higher quality codes.

12Mr. Kwinter, the Assessed Person/Appellant stated that the cost to build, exclusive of GST, was $1,520,000 (rounded) (Exhibit 4). Mr. Attard argues that when added to the land value of $1,534,959, and adjusted for the ravine, the correct current value is $3,621,000.

13The Act does not provide a definition of “vicinity”. The Board considers that those lands located nearest to the subject will provide the most meaningful vicinity, moving outward as necessary to identify similar properties, the analogy being that of a pebble dropped into a pond. “Similar properties” are those which are comparable using a number of factors such as building size, lot size, year built, the quality of construction, etc.

14The Board agrees with Mr. Bassi that the quality of construction is an important consideration in determining the current value of a newly constructed home such as the subject property. The assessor provided the Board with detailed notes from his March 10, 2015 inspection of the subject property, including photos of its exterior and lot, which support the quality code it has been assigned (Exhibit 1). For this reason, the Board agrees with Mr. Bassi that it is necessary to move beyond the immediate area of the subject property as far as necessary to find similar properties.

15Mr. Bassi provided the Board with seven comparables which sold in 2003, 2005, 2006, 2008, and 2009 with two sales occurring in 2011. He confirmed that while the comparables are not all located within the subject property’s homogenous neighbourhood, they are all located within one kilometre of it.

16The subject property is situated south of Lawrence Avenue East, and east of Bayview Avenue. Mr. Bassi’s market analysis included a map showing two comparables near the subject property, with four of the comparables situated west of Bayview Avenue and three of them just south of York Mills Road.

17MPAC’s comparable properties have quality codes ranging from 9.0 to 10.0, and were built in 2003, 2005, 2006, 2008, 2009 and 2011 (Exhibit 1). Mr. Attard relied upon six comparables properties assigned a quality code 9.0 and built in 1990, 1992, 1995, 2006, 2008 and 2009 (Exhibit 6). The parties have two comparables in common (noted * in the table below).

18The Board agrees with Mr. Bassi’s submission that while meaningful comparisons may be made to somewhat older properties with similar quality codes, the taxpayer’s proposed comparables built in 1990, 1992 and 1995 are too old. The Board also included the Appellant’s proposed comparable 28 Saintfield Avenue, as it has a quality code of 9.5 and a similar building and lot size to the subject property.

19Both parties relied upon time adjustments to their comparables to offset fluctuations to the market. The Board prefers Mr. Bassi’s proposed time adjustments as they are supported by data for 240 sales occurring between January 2011 and December 2012 (Exhibit 1, Table B).

20The eight properties described below, like the subject property, are two-storey detached single family dwellings. Building sizes range from 5,171 sf to 7,066 sf and lot sizes range from 12,315.38 sf to 17,200.00 sf. Mr. Bassi asserts that a rate per square foot is an acceptable test of the values of these properties, and submits that the calculated average time adjusted sale price psf demonstrates that the assessment is at current value. He provided the Board with ranges of values psf for his seven properties and calculated an average and median value of $856 psf and $888 psf respectively. With specific regard to 29 Blyth Hill Road and 7 Tudor Gate, he calculated an average value of $949 psf. All values include a 5 % adjustment for the ravine where necessary, and other property-specific adjustments.

21The Board tested MPAC’s approach by considering the relationship between the time adjusted values (including the ravine adjustment), building size and value psf.

Address	CVA	TAS	Year Built	Quality Code	BuildingSize (sf)	Lot Size (sf)	TAS $(psf)	ASR
30 Glenorchy Road	4,727,000	N/A	2013	9.5	6,073	12,319.00	N/A	N/A
7 Saintfield Avenue*	3,650,000	3,896,380	2009	10.0	5,171	13,379.00	790	0.93
28 Saintfield Avenue	3,608,000	3,672,804	2008	9.5	5,414	(12,300)	712	0.98
143 Highland Crescent	3,888,000	4,463,333	2011	9.0	6,140	12,315.38	762	0.87
24 Blyth Dale Road	4,877,000	5,181,585	2003	9.5	6,276	12,852.00	866	0.94
9 Royal Oak Drive*	4,527,000	4,475,006	2006	9.5	6,508	14,758.12	735	1.01
29 Blyth Hill Road	5,543,000	6,010,042	2005	9.5	6,559	17,200.00	916	0.92
65 Highland Crescent	6,130,000	6,337,164	2008	10.0	6,566	15,865.20	942	0.96
7 Tudor Gate	4,789,000	6,618,476	2011	9.5	7,066	14,000.00	982	0.72

22Building sizes range from 5,171 sf sq. ft. to 7,066 sf. The three largest sites are properties that have the highest values, which the Board concludes skews the average value upward. For this reason, the Board finds the best approach to the evidence before it is to situate the subject property within the range of values. The Board adopts MPAC’s test of value psf of building size, but finds the best evidence of value is $737 psf, being the midway point between 28 Saintfield Avenue and 143 Highland Crescent.

23The thrust of the Act is that assessments are based on current value. The Board does not agree that Mr. Attard’s value derived from the cost of construction and land value, adjusted for the ravine, satisfies the test of current value as defined in the Act.

24The Board finds that the current value for 20 Glenorchy Road is $4,476,000 for the 2014 taxation year and for the deemed 2015 taxation years.

Equity

25Section 44.(3)(b) of the Act directs the Board to have reference to the value at which similar lands in the vicinity are assessed, reducing the assessment if required to achieve equity. A comparison of the assessment to sale ratio (“ASR”) permits the Board to compare the assessed values determined by MPAC with values achieved in the marketplace. An ASR that is greater than 1.00 is an indication that MPAC may be producing values greater than those demonstrated in the marketplace, with an ASR of less than 1.00 an indication that MPAC may be producing values less than those demonstrated in the marketplace. A deviation of 0.05 in either direction is generally regarded as acceptable assessment practice. For equity purposes, the Board looks for evidence of less than 1.00, and does not consider a minor deviation to be determinative.

26The only evidence before the Board was an equity analysis prepared by Mr. Bassi, drawn from sales of 30 properties occurring between September 2011 and July 2012 (Exhibit 3). The properties are all single-family dwellings that similar, having the same general nature and function. Mr. Bassi calculated a median ASR of 0.99 which does not demonstrate that a further reduction to the current value is required.

CONCLUSION

27The Board finds that the current value for 20 Glenorchy Road is $4,476,000, and that no further reduction is required to this value to make it equitable with the assessment of similar lands in the vicinity. The Board reduces the assessment from $4,727,000 to $4,476,000 for the 2014 taxation year and for the deemed 2015 taxation year.