Bianco v. Municipal Property Assessment Corporation, 2015 CanLII 86920

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 24, 2015

FILE NO.: WR 133736

Assessed Person(s): Anthony Bianco, Bessy Bianco

Appellant(s): Anthony Bianco, Bessy Bianco

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 14

Respondent(s): Town of Richmond Hill

Property Location(s): 88 Arten Avenue

Municipality(ies): Town of Richmond Hill

Roll Number(s): 1938-060-110-59033-0000

Appeal Number(s): 3062427

Taxation Year(s): 2015

Hearing Event No.: 581846

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

Heard: July 8, 2015 in Richmond Hill, Ontario

APPEARANCES:

Parties	Counsel+/Representative
Anthony Bianco	Self-represented
MPAC	Julie Landon
Town of Richmond Hill	No one appeared

DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT

INTRODUCTION

1The subject property, 88 Arten Avenue, is a two storey, four bedroom detached house with a built-in double garage, situated on a 8,342.19 square foot lot with a frontage of 50 feet and a depth of 166.84 feet. Purchased pre-construction directly from the builder on March 17, 2012 (Offer Date) and scheduled closing date for April 19, 2013. Final adjustments occurred August 19, 2013. The current value assessment for the property, as of January 1, 2012 is $1,034,000 for the 2015 taxation year.

2Julie Landon, appearing on behalf of MPAC, stated that the subject property has been assessed based on the evidence of the sales of similar properties in the vicinity of the subject property, using the Direct Sales Comparison approach. MPAC provided in evidence the sales of three suggested comparable properties as well as a fourth comparable (Exhibit 1, p.14) not used in their analysis.

3The Appellant, Anthony Bianco, is appealing the assessment as being too high. Mr. Bianco provided in evidence the sales of three suggested comparable properties in addition to builder sales information on his property, arguing that his property should be assessed at $926,000.

4The Board’s mandate is to determine both, the correct current value of the subject property and whether the assessment as determined is equitable with the assessments of similar properties in the vicinity of the subject property.

DECISION

5For 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 $1,034,000.

6The Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property requires a further adjustment in accordance with s. 44.(3)(b) of the Act.

7Accordingly the assessment of the subject property as at the valuation day, January 1, 2012, is confirmed at $1,034,000.

REASONS FOR DECISION

Current Value Analysis

8The initial task for the Assessment Review Board (the “Board”) is to determine the current value of the subject property as required by s. 44(3)(a) of the Act “…the Board shall…determine the current value of the land…”

9Section 19.(1) of the Act states that “…the assessment of land shall be based on its current value…” and section 1 of the Act defines current value as “…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…”.

10The best test of current value is an arm’s length and market tested sale of the subject property on the valuation day, January 1, 2012 or close to it. If no such transaction took place, the next best measure of current value would be arm’s length and market tested sales of comparable properties in the same vicinity and market, on or close to the valuation day. This measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

11To enable an estimate of value for the subject property to be derived from a comparable property, there must be sufficient elements of similarity, in terms of physical factors such as total building area, land area, land frontage, age of construction, physical condition, etc.; and in terms of neighbourhood characteristics such as access to amenities, type and nature of housing etc., so as to enable a direct comparison to be made between the comparable property and the subject property.

12Furthermore, to be indicative of both the market and values on the valuation day, a sale of a suggested comparable property should occur close to the valuation day. Generally, the Board prefers the sale of properties that occur within six months on either side of the valuation day. When such evidence is either limited or not available, the Board has accepted sales of properties up to 18 months on either side of the valuation day, or in exceptional circumstances, greater time periods.

13Ms. Landon provided the Board with three sales of which one suggested comparable property, Sale B, she argued to be the most similar to the subject. However, MPAC admitted that all three suggested properties were inferior to the subject.

14Mr. Bianco offered three suggested comparable properties in addition to his own property that sold near the valuation date. Mr. Bianco stated that he relied on the sales prices from two of his suggested comparables, (Exhibits 5 and 6), to determine what he would pay for the subject property, before initiating a purchase from the Builder. The Appellant believes his purchase from the Builder represented the best example of an arms length transaction resulting in a fair price.

15The Board finds MPAC’s Sale B, of its three suggested comparables, to be the best evidence to determine current value for the subject property. Although inferior due to its smaller lot size and age, built in 2004, it is the most similar of the three properties, with a sale occurring close to the valuation date requiring minimal time adjustments to value. With the highest sale price, the Board considers this price point to be the low end of what the subject property would sell for in an open market, given its superior condition and recent construction.

16The Board also entertained the fourth comparable property provided by MPAC, (Exhibit 1, page 14), namely, 49 Arten Avenue. The Board finds this property to be the most similar to the subject property, almost identical in building area, number of bedrooms and year built. Selling in October 2013 in the open market for $1,415,000 with a current value assessment of $1,017,000, and having a smaller lot size than the subject, the Board finds the January 1, 2012 valuation for the subject property to be reasonable.

Appellant’s Arguments

17Mr. Bianco presented as evidence three suggested comparables, 28 Ellsworth Avenue, 131 Arten Avenue, and 123 Arten Avenue. (See Exhibits 5, 6 and 7 respectively), as well as sales documents on his property, which he considers to be the best arms length transaction (see Exhibits 2, 3 and 4).

18The Board places no weight on the evidence as submitted for 123 Arten Avenue. As a line item in a “Geowarehouse Report”, it is lacking sufficient detailed information on the property from which the Board can make any useful determination. The Board finds the property 131 Arten Avenue to be too old (constructed in 1997), and therefore too dissimilar to the subject property to be suitable as a comparable. Both parties also acknowledged sale of this property was a forced sale. The Board gives no weight to this property in its analysis.

19Both parties accepted in evidence the third comparable submitted by the Appellant, 28 Ellsworth Avenue. The Board finds the information found in Exhibits 5 and 7 to be lacking sufficient detail in terms of age of property and building total area to be useful in determining current value for the subject property. The Board gives no weight to this property in its analysis.

20The Appellant argued that the Board should consider the sale of the subject property by the builder as an arm’s length sale between a willing seller and a willing buyer. Submissions in evidence by the Appellant were made to demonstrate the transparent nature of the transaction as that of a fair market sale.

21The Board finds the use of builder sales not reflecting an unencumbered arm’s length sales transaction process between a willing seller and willing buyer. The protracted time interval between the time of negotiating and actual date of purchase suggests such sales are not the best indicator of current value. The Board will not use builder sales in considering the subject property’s current value.

22The Board finds no evidence before it leading to the conclusion that the current value of the subject property requires a further adjustment.

Equity Analysis

23The Act was amended for taxation years beginning with 2009, to require the Board to lower an assessment below current value if required to make the assessment equitable with the assessments of similar properties in the vicinity.

24Section 44.(3)(b) of the Act states that “…the Board shall…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 land.”

25During the hearing the Board asked Ms. Landon to provide the assessment values for the three suggested sales comparables. As only Sale B proved to be the best evidence, only its assessment value was useful. At first glance it would appear inequitable that the Appellant’s property be assessed higher than the best comparable (Sale B). However, the Board does not accept that equity is achieved by reducing a correct current value to an incorrect level on the basis of comparison with a single neighbouring property. The Board requires evidence that many similar properties are assessed at a lower level than the subject for no apparent good reason, in order to warrant an equity adjustment under s. 44.(3)(b). The Board considers the fourth comparable property from MPAC, 49 Arten Avenue, with a January 1, 2012 current value assessment of $1,017,000 as better reflecting equity for the subject property.

26As neither party submitted evidence on the issue of equity, the Board is unable to make a finding that the subject property’s current value would need to be reduced in order to make it equitable with the assessed values of similar properties in the vicinity.

27Accordingly, the Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property, as determined above, requires a further adjustment in accordance with s. 44.(3)(b) of the Act.