Assessment Review Board / Commission de révision de l’évaluation foncière
ISSUE DATE: December 15, 2015 FILE NO.: WR 136636
Assessed Person(s): Guido Marinucci and Joanne Marinucci Appellant(s): Guido Marinucci Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 14 Respondent(s): City of Vaughan
Property Location(s): 7 Bevan Road Municipality(ies): City of Vaughan Roll Number(s): 1928-000-231-04000-0000 Appeal Number(s): 3104428 and 3117832 Taxation Year(s): 2014 and 2015 Hearing Event No.: 595441
Legislative Authority: Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: October 30, 2015 in Vaughan, Ontario
APPEARANCES:
| Parties | Counsel+/Representative |
|---|---|
| Guido Marinucci and Joanne Marinucci | Self-represented |
| MPAC | Leo Verduci |
| City of Vaughan | No one appeared |
DECISION OF THE BOARD DELIVERED BY BARBARA KOWARSKY
ISSUE
1The issue is to determine whether the assessments of 7 Bevan Road (“subject property”) located in the City of Vaughan as returned at $1,098,000 as a supplementary assessment for the 2014 taxation year and $2,337,000 for the 2015 taxation year are correct, and whether they are equitable with that of similar lands in the vicinity.
DECISION
2In order to determine the value assessment of a property, the Assessment Review Board (“Board”) is legislated to follow two steps:
3Section 44.(3)(a) of the Assessment Act (“Act”) which requires the Board to:
(a) “determine the current value of the land.”
4The Board determines the current value to be $1,098,000 for the 2014 taxation year and $2,337,000 for the 2015 taxation year.
5Section 44.(3)(b) of the Act directs the Board to:
(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.”
6The Board finds that an adjustment for equity pursuant to s. 44.(3)(b) is not required in order to make the assessment of the subject property equitable with that of similar properties in the vicinity.
REASONS FOR DECISION
The Subject Property
7The subject property is a single family two-storey home built in 2014. It is situated on a lot measuring 2.34 acres. The total building area is 4,150 square feet (“sq. ft. “) with 430 sq. ft. of finish in the basement.
The Position of MPAC
8The assessor, Leo Verduci, submitted the following into evidence, collectively marked Exhibit 1:
a. a Property Profile b. a Valuation Report c. Vaughan Notice of Public Hearing for April 29, 2014
9Mr. Verduci testified that:
a. In order to find similar properties to the subject property that had sold in the required time period, he conducted a search which produced two properties in a nearby neighbourhood: i. 122 Thornridge Drive – sold in June 2012 for $2,700,000 (time adjusted to January 1, 2012). It was built in 2011; has a lot size of 0.34 acres and the total building area is 808 sq. ft. larger than the subject property. ii. 18 Arnold Avenue – sold in November 2012 for $2,400,000 (time adjusted to January 1, 2012). It was built in 2003; has a lot size of 1.65 acres and the total building area is 714 sq. ft. larger than the subject property.
b. In his opinion, 18 Arnold Avenue is a better comparable to the subject property.
c. There is a proposed draft plan to sever and divide the subject site into eight lots. The potential value of each lot, as of January 1, 2012, would range from $600,000 to $700,000.
d. The subject property would be one of these eight. The total potential value of the remaining seven lots is $4,200,000.
e. There are some existing roughed in services for the seven lots and therefore there is development potential.
10Based on this evidence and opinion, Mr. Verduci is confident that the current value assessment is reasonable and correct.
The Position of the Appellants
11Guido and Joanne Marinucci submitted the following documentary evidence, collectively marked Exhibit 2:
a. 16 properties from MPAC’s “My Neighbourhood Properties of Interest” b. the detailed draft of the proposed subdivision of the property with the problems listed; c. an MPAC “Single Property Map”, “Assessment Roll Lookup” and “ICI Commercial Report”, all for 10 Bevan Road
12Mr. and Mrs. Marinucci’s testimony is encapsulated as follows:
a. The land is encumbered by easements. These easements are in favour of the City and the farmers. b. Their neighbour at 10 Bevan Road will not sell his share of the road. This will prevent development of the planned lots since they have no access to their neighbour’s portion of the entrance. c. The Municipality will not accept the level of the services that exist. d. The property at 10 Bevan Road was sold in December, 2011 for $2,000,000. The assessment for this 11.25 acre property is $2,400,000. e. The suggested comparables on their list are in the same neighbourhood as the subject property, with the exception of 231 and 261 Greenbrooke and the two MPAC suggested comparables. The assessments for all of these properties range from $1,400,000 to $1,600,000. f. The property located at 43 Church sold in September, 2015 for $1,749,000. It is an older home, built in 2005, is a slightly larger house and is situated on a lot measuring 0.35 acres.
Analysis and Findings
13The assessment legislation (attached to this decision as “Appendix A”), as amended for taxation year 2009 and subsequent years, directs the Board to determine the current value of the subject property, having reference to the value at which similar lands in the vicinity have been assessed. Once current value is determined, the Board may reduce an assessment where it finds that it is inequitable with that of similar lands in the vicinity.
14Mr. Verduci testified that in his opinion, the construction of the subject property is a higher quality than any of the comparables presented today.
15Mr. Marinucci, who testified that he is “in the business” cites 4 Oldfield and 4 Welton, which, in his opinion, are better built than his home.
16Mr. Verduci suggests that because Mr. and Mrs. Marinucci have applied and re-applied for permission to subdivide the property, they too believe that there is additional inherent value in the subject property.
17Mr. and Mrs. Marinucci testified that the easements and encumbrances pose tremendous obstacles to the potential subdivision application and that they are at the “mercy of others”, so that this potential may never be realized.
18They also challenged the occupancy date of their home as registered by MPAC.
19Mr. Verduci testified that an MPAC assessor visited the property on April 22, 2014, could not enter, but saw furniture in the house. He noted in his report that the finishes were completed, from what he could see through the window, and therefore considered the house to be complete.
20The Marinuccis testified that they took up residency in October, 2014.
The Current Value of the Land
21The best evidence of current value is an arm’s length and market tested sale of the subject property on the valuation date, January 1, 2012, or close to it. This did not occur.
22Mr. Marinucci testified that 10 Bevan Road was sold to a numbered company. When he approached his neighbour prior to that sale, she would not sell the property to him. This leads him to believe that this was a private sale.
23Mr. Verduci responded that his investigation revealed no evidence to support that this was a private sale.
24Mr. Verduci testified that his search for comparable sales took him out of the subject property’s neighbourhood, and that the comparables are close to amenities. The subject property is also close to amenities and highways, experiences less traffic and is “in a good area.”
25Mr. Verduci believes that the Appellants are relying on the assessment values of their suggested comparables. They assume these assessments are correct. However, if they are altered (in order to adjust for differences to make a comparison to the subject property), then using these assessments would make these values useless.
26Mr. Verduci contends that the assessment of $2,337,000 is correct and reasonable and that no evidence was submitted to identify the separate values of the lands and structures.
27Only one property introduced by Mr. Marinucci, 261 Greenbrooke, has a site area similar to the subject property. This suggested comparable has a house that is 2,563 sq. ft. larger than the subject property and is 16 years older.
28Mr. Verduci testified that it is common knowledge that property values have increased since the valuation date of January 1, 2012. The Greenbrooke suggested comparable sold in May, 2014, at a sale price of $2,200,000. The Board is expected to speculate that the difference between the sale price of this property and the assessed value of the subject property, may well be attributed to the age difference, quality difference and depreciation.
29Similarly, 18 Arnold Avenue and 122 Thornridge Drive, although situated in a different neighbourhood that is close by, are on smaller lots and are both larger structures (714 and 808 sq. ft. respectively). The sales also reflect a rising real estate market and the time adjusted sale prices reflect values greater than the assessed value of the subject property.
30Furthermore, when the Board was presented with the assessment values of these two MPAC suggested comparables, the Board was able to calculate the assessment to sales ratios (“ASR”) for each of these properties. The results, 0.85 and 0.80, indicate that MPAC has under-assessed the values of these properties. This is too small a sample to be definitive, but it is a strong indicator that property values may well be higher than what the assessments reflect, and that the sale amounts of the properties are a better indicator of value.
31The Board finds that while there may be “future potential” value in the land of the subject property, there are many challenges that must be overcome. The first application expired, the owners are still faced with the same encumbrances and they have commenced a new draft plan that has yet to be successful.
32Therefore, the potential value of the land on January 1, 2012, suggested by Mr. Verduci, is speculation at best since the owners are “no where near” being successful in achieving their goal of severance.
33Notwithstanding either of these arguments, the sales presented by both parties all indicate sale amounts that are greater than the assessed values established on January 1, 2012.
34As to the occupancy date, the Board has sworn testimony from the Appellants that they took up residency in October, 2014. The assessor who registered the occupancy as at April, 2014 was not here to testify and Mr. Verduci testified that he only has notes as to what that assessor “saw through the window.” The Board has no evidence with which to amend the s. 34 value based on this six month occupancy discrepancy.
35There was testimony from both parties as to quality differences. This was all opinion since the Board received no evidence to support these opinions.
36The evidence submitted by MPAC and the Appellants indicate that property values have increased based on sales. The land has value regardless of any structures. The encumbrances may well present more obstacles than potential. Again, this is opinion and this Board does not have the legislative jurisdiction to engage in speculation.
37In relation to the property at 10 Bevan Road, the Board has no evidence to confirm that half the property is under the Conservation Authority and therefore cannot be developed, nor was the Board presented with any evidence to support the testimony that the 2011 sale was private.
38Therefore, based on the evidence submitted, the Board confirms the 2014 assessment of $1,098,000 and the 2015 assessment at $2,337,000.
Equity with Similar Lands in the Vicinity
39The Board is required under s. 44.(3)(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 land of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment.
40The Board finds no adjustment in regard to equity is required.
CONCLUSION
41Based on the totality of the evidence presented, the Board confirms the assessment of the subject property of $1,098,000 for the 2014 taxation year and $2,337,000 for the 2015 taxation year.
“Barbara Kowarsky”
BARBARA KOWARSKY 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
APPENDIX ‘A’
The Legislation
In arriving at a decision, the Board must consider the following provisions of the Act:
Section 19.(1) of the Act states:
19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.
“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.
Section 19.2(1)(2) of the Act provides:
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 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.
- 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.
Section 34 of the Act provides:
34.(1) Supplementary assessments - If, after notices of assessment have been given under section 31 and before the last day of the taxation year for which taxes are levied on the assessment referred to in the notices,
(a) an increase in value occurs which results from the erection, alteration, enlargement or improvement of any building, structure, machinery, equipment or fixture or any portion thereof that commences to be used for any purpose; (b) land or a portion of land ceases, (i) to be exempt from taxation, (ii) to be farm lands the current value of which is determined in accordance with subsection 19 (5), (iii) to be conservation land the current value of which is determined under subsection 19 (5.2), (iii 1) to be land in the managed forests property class the current value of which is determined under subsection 19 (5.2) or (5.2.1), (iv) to be land the current value of which is based on current use under regulations made under subsection 19 (2), or (v) to be classified in a subclass of real property; (c) Repealed: 1997, c. 5, s. 22 (1). (d) pipeline increases in value because it ceases to be entitled to the reduction provided for in subsection 25 (9),
the assessor may make the further assessment that may be necessary to reflect the change, and upon receiving notice of the further assessment, the clerk of the municipality or, in the case of land in non-municipal territory, the Minister shall enter a supplementary assessment on the tax roll and the amount of taxes to be levied thereon shall be the amount of taxes that would have been levied for the portion of the taxation year left remaining after the change occurred if the assessment had been made in the usual way.
Supplementary classification
(2) If, during the taxation year or the period after June 30 in the preceding taxation year, a change event, within the meaning of subsection (2.2), occurs that would change the class of real property that a parcel of land or a part of such a parcel is in, the assessor may change the classification accordingly, including any subclass, and, upon receiving notice of the change, the clerk of the municipality or, in the case of land in non-municipal territory, the Minister shall enter it on the tax roll and the tax levied for the taxation year shall be determined in accordance with the new classification
Limitations
(2.1) The following apply with respect to subsection (2):
- Subsection (2) does not affect the tax levied for the taxation year in respect of a part of the taxation year preceding the change event.
- Paragraph 1 does not apply to a change event described in clause (c) of the definition of “change event” in subsection (2.2).
- Repealed: 2000, c. 25, s. 9.
1998, c. 3, s. 8 (2); 2000, c. 25, s. 9.
“change event”
(2.2) For the purposes of subsections (2) and (2.1),
“change event” includes,
(a) a change in the use of all or part of the parcel of land, (b) an act or omission that results in all or part of the parcel of land ceasing to be in a class of real property, and (c) the opting, by a council of a municipality, including an upper-tier municipality, to have a class of real property apply or cease to apply within the municipality. 1998, c. 3, s. 8 (2); 2002, c. 17, Sched. F, Table.
(2.3) Repealed: 2006, c. 33, Sched. A, s. 24 (3).
Re-classification
(3) If subclause (1) (b) (ii) or (v) apply with respect to land or a portion of land, the assessment corporation, in addition to making a further assessment, may also change the classification of the land. 1997, c. 29, s. 18 (2); 2006, c. 33, Sched. A, s. 24 (4).
Changes to next assessment roll
(4) If the assessment corporation makes an assessment or classification under this section, or could have done so but did not, the appropriate changes shall be made on the assessment roll for the next year, even if the day as of which land is valued for the next year is the same as for the current year. 1998, c. 3, s. 8 (3); 2006, c. 33, Sched. A, s. 24 (5).
Section 40.(17) of the Act provides:
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.
Section 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.
Section 44.(3)(a) and (b) 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.