Henderson v Municipal Property Assessment Corporation Region 24, 2015 OARB minicounsel 17

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 21, 2015

FILE NO.: WR 130287

Assessed Person(s): William David Henderson

Appellant(s): William David Henderson

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 24

Respondent(s): Morris-Turnberry Municipality

Property Location(s): CON 5 PT N PT LOT 26

Municipality(ies): Morris-Turnberry Municipality

Roll Number(s): 4060-540-005-03000-0000

Appeal Number(s): 2997897, 3044883 and 3091665 (deemed 2015)

Taxation Year(s): 2013, 2014 (and deemed 2015)

Hearing Event No.: 562171

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

ARB Case Name: WR 130287

Heard: August 26, 2014 in Exeter, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

David Henderson

Self-represented

Desiree Henderson

MPAC

Jody Hdy

Morris-Turnberry Municipality

No one appeared

DECISION OF THE BOARD DELIVERED BY RICK LIMOGES AND ROBERT STEINBERG

INTRODUCTION

1These appeals came before the Assessment Review Board (“Board”) on August 26, 2014 in the Municipality of South Huron. An extension of time was granted by the Associate Chair where Written Reasons were authorized on February 5, 2015. The parties agree that the subject land should be classified as Managed Forest (Full) however the appellants are not satisfied that the proper rate in the O. Reg 282/98 Part IX, Managed Forest Values by Geographic Area and Land Band' was used since the table in the Ontario Regulation does not specifically differentiate between the land bands in newly amalgamated municipalities. The appellants are also concerned that no comparable properties were used by MPAC in order to determine the new current value as of January 1, 2012.

DECISION

2The MPAC returned value for the 2013 and 2014 taxation years is confirmed at $104,000. The Property Class is changed from Non-Assessable Unit to Managed Forest (Full) for the 2013 taxation year and confirmed as Managed Forest (Full) for the 2014 taxation year with no further adjustment required to make it equitable with similar properties in the vicinity.

REASONS FOR DECISION

Property Description and Evidence at the Hearing

3The subject property is a 60 acre vacant fully treed site located in the rural Municipality of Morris-Turnberry in the Province of Ontario. The property is approved in the Managed Forest Tax Incentive Program by the Ministry of Natural Resources. Desiree Henderson, representing the appellant, submitted Exhibit 2 'Disclosure' and Exhibit 3 'Closing Statements and attachments' in support of their case. The parties agree that the appropriate classification for the subject 60 acre property is Managed Forest (Full) however the appellants believe that their property value is overstated and submitted a copy of a one page 'Opinion of Value' from Harry Wilson, Sales Representative Royal Lepage Heartland Realty for $65,000 who was not present at the hearing to testify or respond to questions. The Henderson’s included six properties classified as Managed Forest, Conservation Land or Vacant Land along with lower relative per acre values. The descriptions of these suggested comparables did not provide sufficient information for a reliable comparison and did not include information relating to the sales of such properties in the relevant timeframe. The property that did sell was listed by MPAC as a different property type. In each case MPAC responded that the comparables were assessed properly according to the legislation and regulations, along with their use and location which differed from the subject property. Finally they object to the 35% increase in property value since the January 1, 2008 valuation date which they believe does not reflect the subject market.

4Jody Hdy representing MPAC advised that the subject property is located in the former town of Morris. Woodlots in the former town of Morris are in Land Band 2407 and priced at $1,744 per acre and those in the former Town of Turnberry are in Land Band 2406, priced at $1,574 per acre, both Bands are listed in the current table found in O. Reg. 282/98 as Municipality of Morris -Turnberry and not otherwise differentiated in the table. Ms. Hdy testified that the subject property is compared to Class 4 or fully treed lots and using the average selling price of such properties they calculated the ceiling value for the subject property as $123,000. Since the ceiling value is higher than the value derived from the table, the lower value was used. Pursuant to s. 44(3) of the Assessment Act, (“Act”) MPAC have provided six comparable properties in the vicinity along with pictures and descriptions to demonstrate that the subject property is assessed equitably when compared to the assessments of similar properties in the vicinity.

The Legislation

5The Board’s jurisdiction to make corrections to an assessment is found in the Act. Section 19.(1) of the Act provides that the assessment of a property must be based upon its current value:

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

Ontario Regulation 282/98 Part V.1 provides;

Assessment of the Managed Forests Property Class and Related Land

Determination of Current Value

32.1 (1) The current value of land in the managed forests property class shall be determined as follows for the 2013 and subsequent taxation years:

1. Determine the value of the land in accordance with subsection 19 (5.2) of the Act.

2. Determine the value of the land in accordance with subsection (2).

3. If the value determined under paragraph 1 is less than the value determined under paragraph 2, the current value of the land is the value determined under paragraph 1.

4. If the value determined under paragraph 2 is less than 31 per cent of the value determined under paragraph 1, the current value of the land is the amount calculated by multiplying the value determined under paragraph 1 by 0.31.

5. In any other case, the current value of the land is the value determined under paragraph 2. O. Reg. 656/05, s. 1; O. Reg. 394/08, s. 2; O. Reg. 339/12, s. 1.

(2) For the purposes of paragraph 2 of subsection (1), the value of the land is determined as follows:

1. Determine whether the geographic area in which the land is located is listed in Column 2 of Table 1 to Part IX.1 of this Regulation. If it is, take the step described in paragraph 2. If it is not, take the steps described in paragraphs 4 and 5.

2. If the geographic area is listed in Column 2 of Table 1, determine whether the land band for the land, as assigned by the assessment corporation, is listed in Column 3 of Table 1 for the applicable geographic area. If it is, take the steps described in paragraphs 3 and 5. If it is not, take the steps described in paragraphs 4 and 5.

3. For land located in a geographic area listed in Column 2 of Table 1 and assigned to a land band listed in Column 3 of Table 1, identify the applicable value per acre of the land as set out in Column 4 of Table 1.

4. For any other land, identify the applicable value per acre of the land as set out in Column 2 of Table 2 to Part IX.1 of this Regulation using the land band assigned to the land by the assessment corporation.

5. The value of the land is calculated by multiplying the applicable value per acre of the land by the acreage. O. Reg. 656/05, s. 1; O. Reg. 101/09, s. 1.

(3) In this section,

"land band" means a geographic area in which similar farm properties sell for similar prices, as determined by the assessment corporation under subsection 19 (5) of the Act. O. Reg. 656/05, s. 1.

6Section 19.2(1) 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:

1. For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.

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.

7Regulations, special rule

19(2) The Minister may make regulations,

(a) providing that the current value of eligible land be based only on current use if the land would otherwise have a higher current value because of other uses to which the land could be put;

(b) prescribing what land is eligible for a determination of current value based only on current use including prescribing how long the land must have been used for its current use to be eligible. 1997, c. 5, s. 12.

Same

19(2.1) The Minister may make regulations providing that the current value of land must be determined in the manner specified in the regulations. 1999, c. 9, s. 11.

Conservation land, managed forests

19(5.2) The current value of land that is conservation land as defined in the regulations or land in the managed forests property class shall be based only on the current use of the land and not other uses to which the land could be put. 2005, c. 28, Sched. A, s. 2.

Current value of managed forests

(5.2.1) Despite subsection (5.2) and any other provision of this Act, the Minister may, by regulation, provide that the current value of land in the managed forests property class shall be determined in accordance with the regulations. 2005, c. 28, Sched. A, s. 2.

Deliberations of the Board

8The appellants have applied for and have been approved for 'Managed Forest (Full)' classification for the subject property for the 2013 and 2014 taxation years. The Managed Forest Tax Incentive Program (MFTIP) provides for a reduction in property taxes in order to encourage participation. As a result, designated properties are taxed at 25% of the municipal residential rates. The provisions in O. Reg. 282/98 with respect to assessment apply to all Managed Forest properties, including the regulated rates prescribed by the Minister of Finance found in the table under Part IX.1 “TABLE 1 MANAGED FOREST VALUES BY GEOGRAPHIC AREA AND LAND BAND” where according to MPAC, the subject property is found in land band 2407 at a specified rate of $1,744 per acre. MPAC's choice of land band based on the band used prior to the municipal amalgamation has not been refuted by any evidence at this hearing. The subject property is 60 acres thus (60 X $1,744 = $104,640) or $104,000 (rounded). This value is less than the ceiling value calculated by MPAC based on the sales of similar Class 4 properties. With regard to the complaint of a 35% increase from the previous valuation date, the Board finds no provision in the Act for deriving current value based on a previous valuation date. The Act provides that the current value is to be determined ‘as of’ the specific valuation date as noted above. Since there is an increase in the current value from the January 1, 2008 valuation date, the increase in value for taxation purposes will be phased in by 25% per year as calculated by the Municipality in consultation with MPAC.

DECISION

9The MPAC returned value for the 2013 and 2014 taxation years is confirmed at $104,000. The Property Class is changed from Non-Assessable Unit to Managed Forest (Full) for the 2013 taxation year and confirmed as Managed Forest (Full) for the 2014 taxation year with no further adjustment required to make it equitable with similar properties in the vicinity.

2015 DEEMED APPEAL

10An appeal for the 2014 taxation year is presently before the Board. Section 40.(26) provides that the Appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2014appeal before March 31, 2015. For that reason, this decision also applies to the 2015taxation year.

11Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.

Footnotes

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