Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 6, 2015

FILE NO.: WR 133487

Assessed Person(s): Brian William Ross and Catherine Ann Ross

Appellant(s): Brian Ross

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 17

Respondent(s): Town of Gravenhurst

Property Location(s): 1443 Southwood Road

Municipality(ies): Town of Gravenhurst

Roll Number(s): 4402-030-011-00203-0000

Appeal Number(s): 3044838 and 3088026

Taxation Year(s): 2014 and 2015

Hearing Event No. 587144

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

Heard: July 6, 2015 in Gravenhurst, Ontario

APPEARANCES:

Parties	Representative
Brian Ross	Self-represented
MPAC	Pam Mulligan Donna Ridley
Town of Gravenhurst	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

INTRODUCTION

1The subject property is an irregularly-shaped parcel of land 29.37 acres (“ac”) in size with frontage on Southwood Road, a road maintained by the Municipality year round. Hydro is available. The topography of the land is a combination of environmentally-protected marshland which is also designated as “flood plain”, and a forested section punctuated by rock outcrops typical of the Canadian shield. A large detached two-storey garage measuring 3,120 square feet (“sq. ft.”) is located on the property. The property is classified as residential. The assessment for 2014 was returned in the amount of $136,000. The Appellant seeks a reduction on the ground that the property contains very little buildable land given the rocky terrain and the large protected area. Mr. Ross argues that the assessed value has increased 27% when the average increases in property value in the vicinity have seen an average overall increase of 4.28%. He seeks a reduction in keeping with the average increase and in keeping with the restrictions on the buildable area of the subject property. Mr. Ross submits that the current value of the subject property should be $60,000, although the maximum based on the 2008 assessment of $107,000, increased by the average 4.28%, would be $111,580.

ISSUE

2The Board must determine both the correct current value for the subject property and whether the assessment of the subject property is equitable with the assessments of similar properties in the vicinity of the subject property.

DECISION

3For the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (“Act”), the Board finds that the current value of the subject property as at the valuation day, January 1, 2012, is $136,000.

4The Board finds also that there is no evidence before it leading to the conclusion that the current value of the subject property requires a further adjustment on the ground of equity as set out in s. 44.(3)(b) of the Act.

5The assessment of the subject property for the taxation years 2014 and 2015 is $136,000.

REASONS FOR THE DECISION

6The best measure of current value is an arm’s length and market-tested sale of the subject property on or around the valuation day – January 1, 2012. If no such transaction took place, a further measure of current value is derived from the 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 burden of proof for establishing the correctness of value lies with MPAC.

7Section 44.(3)(a) of the Act requires the Board to first “determine the current value of the land.” The definition of “current value” is contained in s. 1 of the Act:

“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.

8Section 19.(1) of the Act states that,“…the assessment of land shall be based on its current value…”

9Comparing vacant properties which are vacant residential lots is challenging because no two lots will be identical, and many features make up their desirability for a potential purchaser. These features will include: site topography; the availability of potential building sites; water quality; and exposure. Other factors enter into consideration of value including accessibility by road, the availability of services including hydro, and restrictions imparted by legislative protections including by-laws governing Environmental Protection (“EP”) Zones.

10Evidence for MPAC was presented by Pam Mulligan, a Property Valuation Analyst. Ms. Mulligan filed Exhibit 1, her Property Valuation Report for the subject property. This exhibit contained three photographs of the subject property, including the structure, plus a topographical map and aerial photograph of the subject property and each of her six comparable property sales located within 12 kilometres (“km”) of the subject property.

11The parties agreed that using comparable sales to establish current value of the subject property was the preferable method.

12Mr. Ross filed Exhibit 2, which contained his argument in the form of a letter to MPAC written June 14, 2015, several maps of the area, an aerial photograph of his property, and photographs taken from the road of the six comparable properties selected by MPAC. Mr. Ross also included a number of newspaper advertisements listing similar properties for sale in Muskoka and Parry Sound Districts, and an excerpt from the Town of Gravenhurst zoning by-law 2010-04 updated to February, 2013.

13Neither party presented concise information as to the proportion of the land subject to the EP legislation and flood plain. However, aerial photographs and a topographical map show approximately one-third to one-half of the subject property is subject to building restrictions imposed by Zoning By-law 2010-04. Permitted uses for this portion of the property include bird sanctuaries, conservation, passive outdoor recreation, wildlife reserves, or works and facilities connection with flood control, erosion prevention or pedestrian access. No buildings except previously-existing buildings are permitted in the environmentally protected area. There are presently no buildings in this area. No building is permitted within 10 metres of the EP zone.

14The six comparable properties introduced by MPAC include five properties in the District of Muskoka and one located in Simcoe County. Some include EP lands; others do not. All six properties are smaller than the subject property. The following chart sets out the salient details for comparison:

TABLE A COMPARISON CHART FOR MPAC SALES A THROUGH F

Property	Sale Price (TA)	Date Sold	Size (Ac.)	$ per acre	Structure	EP	Hydro	Topography
Subject			29.37	$4,630	Garage	4	4	Rocky, marshy
A - 2900 Telford Line	133,995	Apr-11	13.61	$9,845	Garage	4		Level
B - Peninsula Rd.	$42,456	Dec-11	9.76	$4,350		4	4	Level
C - Canning Rd.	$79,364	May-11	16.61	$4,778				Slight slope
D - 1084 Tower	$55,605	Jun-10	5.06	$10,989				Level
E - Shamrock Marina	$59,581	Aug-11	2.03	$29,350			4	Level
F - Art Crisp Rd.	$64,500	Jul-11	6.88	$9,375			4	Level

15Ms. Mulligan submitted that MPAC had already adjusted the subject property for the topography (wet, marshy) and for being “fair” or less than average with respect to utility and building area. None of Ms. Mulligan’s comparable sales have the same proportion of EP lands and/or rocky lands. Ms. Mulligan submits that the best comparable sale is the 2900 Telford Line property which is located in Simcoe County. Mr. Ross’ photographs of the Telford Line property taken from the side of the road show a level property under cultivation. The property visually bears little resemblance to the subject property, is a little less than half the size of the subject property, and would appear from Mr. Ross’ photograph to be arable land, something the subject property is not.

16Ms. Mulligan’s remaining comparable sales are all smaller parcels than the subject located on year-round maintained roads. Only Sale B, Peninsula Road, a parcel approximately one-third the size of the subject property, has any portion of EP lands contained within its borders. None of the comparable sales provided by MPAC, with the exception of the Telford Line property, contain structures. Using Mr. Ross’ photographs of these properties from the side of the road, hydro is available at the road for all but Sale C (Canning Road) and Sale D (Tower Road).

17Mr. Ross provided no property sales for comparison purposes. While he provided the Board with nine samples of vacant lands for sale in Muskoka and elsewhere, these samples lack sufficient detail and confirmation of eventual selling prices to be useful in determining the current value of the subject property.

18The Board prefers to rely on sales which took place in the District of Muskoka, and also prefers to use sales taking place within 12 months of the valuation day, January 1, 2012. Based on that criteria, the Board rejects MPAC’s Sale A (2900 Telford Line) and Sale D (1084 Tower Crescent). The Telford Line property is also too dissimilar in respect of topography from the subject property.

19The remaining four comparable sales are dissimilar from the subject in that only one has a section of EP lands, and all four are relatively level in comparison to the subject. None of these four comparable sales has a structure. However, they provide the best comparisons given in evidence. What these sales demonstrate is that the per-acre value of the subject property based on the assessment is similar to the value per acre of two of the accepted comparable sales (B and C) while being significantly less than the value per acre of the other two sales (E and F).

20Mr. Ross testified that the restrictions imposed by the EP regulation, along with the cost to build on the remainder of his lot, described as very rocky, make his property undesirable as a building lot. While he originally intended to sever the property into three building lots, he learned that this is impossible because of the EP restrictions. While his garage is built on a level portion of the land, any other structures requiring a foundation and septic tank would require blasting, which would significantly add to the cost of construction and thereby reduce the amount a willing buyer will pay for the land.

21The Board agrees that blasting through rock will increase the cost of building. However, Mr. Ross offered no evidence respecting the actual cost of blasting, nor of the effect this has had on comparable property prices. While Mr. Ross offered the opinion that the value of the land is no more than $60,000, he offered no evidence in support of this figure. Consequently, the Board was unable to consider the potential cost of building in determining the current value of the land.

22The value per acre of the subject property is in keeping with two of the comparable sales and is much lower than the other two accepted as comparable properties. The subject property is a larger parcel than all the comparable sales, and would usually have a lower price per acre than smaller parcels. However, the subject property contains a large garage built 20 years ago, which would add to its value. No evidence was introduced which would lead the Board to conclude that the current value is less than $136,000.

Equity

23Once the Board has determined the current value of the land, it is required by s. 44.(3)(b) of the Act to:

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.

24Ms. Mulligan provided the Board with her Equity Analysis derived from the sales of 30 similar properties within 11.49 km of the subject property. Of the 30 sales, occurring between January, 2010 and October, 2012, the assessment to sale ratios (“ASR”) for ten of the 30 were within 5% of 1.00 or perfect accord between assessed values and sales prices. The median was .98, which is an acceptable level of assessment for the Board’s purposes. Mr. Ross did not introduce any evidence of the assessed values of similar lands in the vicinity of the subject property, and the Board therefore will make no adjustment to the assessment on the ground of equity.

CONCLUSION

24The Board determines that the current value of the subject property is $136,000.

25The Board finds there is no evidence before it supporting the conclusion that the value of the subject property requires an adjustment in accordance with s. 44.(3)(a) of the Act in order to make it equitable with the assessed values of similar properties in the vicinity.

26The Board therefore confirms the assessment of the subject property as at January 1, 2012, for the 2014 and 2015 taxation year in the amount of $136,000.