Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 9, 2015

FILE NO.: WR 133236

Assessed Person(s): Gerardo Capocci and Rosina Capocci

Appellant(s): Gerardo Capocci and Rosina Capocci

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 9

Respondent(s): City of Toronto

Property Location(s): 1664 St. Clair Avenue West

Municipality(ies): City of Toronto

Roll Number(s): 1904-032-390-09300-0000

Appeal Number(s): 3012225, 2997502 and 3077397 (deemed 2015)

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

Hearing Event No. 562757

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

Heard: November 28, 2014 in Toronto, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
Gerardo Capocci	Self-represented
MPAC	Rob Boccia
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY SANDRA DRIESEL

INTRODUCTION

1The Appellant Gerardo Capocci is self-represented.

2MPAC reports the subject property is 1918 year built two-storey building with a residential unit above a commercial business. It consists of 1,764 square feet of building total area (“BTA”) on a lot of 12.00 feet X 151.25 feet. Mr. Capocci agrees with the description of the property as submitted.

3Mr. Boccia notes that he inspected the property just prior to the hearing and confirmed the property profile data on file to be correct. He adds that as a result of this inspection he reduced the current value assessment (“CVA”) to $376,000 from $483,000 as returned on the roll. Mr. Capocci rejected this reduced CVA believing it should be substantially lower.

4Mr. Boccia argues that his direct comparison approach using the sales values of five suggested comparable properties support his opinion that $376,000 is the correct current value.

5Mr. Boccia notes his Equity Analysis report to shows that MPAC is correctly assessing properties in the vicinity and the subject property is equitably assessed.

6Mr. Capocci argues that MPAC has arrived at a CVA for his property by comparing his property to sales of properties that are not similar to his. He submitted various photographs to show his property and properties used by MPAC in their sales investigation report. He added that there are factors related to this location that have negatively impacted commercial business and that long standing businesses in the neighbourhood are increasingly shutting down. In his opinion, property values in this neighbourhood have decreased since the previous (2008) assessment. He submits that MPAC has failed to prove an increase in his property value since the last assessment in 2008 and therefore believes that his CVA should actually be reduced from the previous CVA or at least remain at the previous value of $254,000.

7To support his opinion that MPAC is over-assessing his property and others in the vicinity, Mr. Capocci submits his evidence that all of MPAC’s suggested comparable properties sold for much less than the asking prices and, as shown in MPAC’s own evidence all properties are assessed higher than their sale prices.

ISSUES

8The first issue before the Board is to find a correct current value for the subject property for the 2013 and 2014 taxation years that is equitable with the assessment of similar lands in the vicinity.

9The Appellant raises an issue that MPAC has failed to provide proof that the property values in his neighbourhood have increased since the previous, 2008 CVA.

DECISION

10The Board finds that the current value of the subject property is $328,440 for the 2013 and 2014 taxation years.

11The Board finds that there is no evidence to support a finding that the assessment of the subject property should be reduced below the current value to make it equitable with the assessments of similar properties in the vicinity.

12The decision of the Board is to reduce the assessment from $483,000 to $328,440 for the 2013 and 2014 taxation years. The apportioned CVA is changed as follows:

As returned on the roll: Reduced to:

Commercial Class: $120,000 $ 81,600

Residential Class: $363,000 $246,840

Total: $483,000 $328,440

REASONS FOR DECISION

The Legislation

13The Board is directed by the following sections of the Assessment Act (“Act”):

14Section 19.(1) of the Act states:

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

15Current value is defined in section 1:

“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.

16Section 19.2(1)2 of the Act states:

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:

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.

17Section 40.(17) of the Act states:

40.(17) 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. 2008, c. 7, Sched. A, s. 11.

18Section 44.(3) 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.

Regarding Section 44.(3)(a) – Current Value

19To determine a correct current value, the best evidence is an arm's length sale of the subject property on or near the valuation date of January 1, 2012. If there is no such transaction on the subject property, the Board looks to the sales of similar properties in the vicinity to determine if the sales evidence suggests that a current value requires correction. For the Board's purposes, "similar" relates to design, size, age, amenities, condition, construction and so forth.

20With no current sale on the subject property, the Board looked to the sales of suggested comparable properties submitted in evidence.

21To support MPAC’s opinion of a correct current value Mr. Boccia submitted a Valuation Report (Exhibit 1). This report included a sales investigation report showing sales of five suggested comparable properties in the vicinity. The sales values of these properties range from $389,000 to $465,000 all higher than the reduced CVA of the subject property.

22On review of these properties used by MPAC to support their opinion of value the Board found that properties 50 years newer than the subject were not similar enough to be used as a comparable to determine a correct current value. Therefore, both 1676 and 1680 St. Clair was eliminated from the Board’s analysis.

23On MPAC’s remaining suggested comparables, the Appellants submissions (Exhibit 3) suggests that the remaining properties, 1701, 1724 and 1768 St. Clair have attributes that are not similar, but superior to the subject property and/or there are chattels included in the sales price.

Table 1: MPAC’s Sales Used to Support the Subject Value:

	Year Built	BTA	Lot	Sale Price	Comparison to Subject Use:	Sale incl’s:
Subject	1918	1,764	1,815		1 apt + Commercial
1701 ST. CLAIR	1924	2,178	2,048	$ 465,000	3 Apts + Retail	Appliances
1724 ST. CLAIR	1923	2,424	2,575	$ 428,000	3 Apts + Retail -Renovations	Appliances
1768 ST. CLAIR	1920	2,012	1,639	$ 428,000	1 Apt +Restaurant	Chattels and fixtures.

24From the above (Table 1), the Board finds that none of these suggested comparables are similar enough to be useful in determine a correct current value. At best, the Board can conclude that the CVA of the subject property should be lower than $428,000 (the lowest value of the three properties).

25The Board then considered the submissions by Mr. Capocci that MPAC’s own evidence (Exhibit 1) indicate that the properties used by MPAC to support his CVA are over-assessed and as a result his property is over-assessed.

26MPAC’s sales investigation report provides the 2012 CVA and the sale amount for each of the five suggested comparables. Information here shows these properties to be in the same homogeneous neighbourhood and they are the same property code as the subject. From this information, the Board calculated an Assessment to Sale Ratio (“ASR”) for each property (see Table 2 below).

27The Board notes that although an ASR is commonly used to determine a finding of an equitable current value, with the lack of other evidence to support a correct current value the Board may look at this test to address an issue of ‘over-assessment’.

28An ASR is a comparison of what a property is assessed at compared to what it actually sold for on or near the valuation date. The ASR may be used as a test of the method used to determine the property's assessment value. If sales are similar in nature, e.g. property code ‘471’ and are in the same homogeneous neighbourhood, the Board may infer that MPAC has used the same assessment methodology for the subject property as it did with the suggested comparable properties presented in evidence. Therefore, the review of the average ASR's may indicate whether MPAC may be under of over-assessing the area. An ASR of less than 1.00 indicates that MPAC's methodology may be producing values less than the values expressed in the marketplace (e.g. sales). Conversely, an ASR greater than 1.00 indicates that MPAC's methodology may be producing values greater than the values expressed in the market place.

Table 2: ASR on MPAC’s Suggested Comparables Used to Support a Correct CVA (sorted by ASR):

Address	Property Code	2012 CVA	Sale Price	ASR
1701 ST. CLAIR	471	$ 506,000	$ 465,000	1.09
1768 ST. CLAIR	471	$ 521,000	$ 428,000	1.22
1680 ST.CLAIR	471	$ 577,000	$ 420,000	1.37
1676 ST. CLAIR	471	$ 564,000	$ 389,000	1.45
1724 ST. CLAIR	471	$ 631,000	$ 428,000	1.47
Total:				(6.60)
Average (÷ X5) =				1.32

29From the above, the Board finds that MPAC is over-assessing these types of properties in this neighbourhood. It is interesting to note that the sale on 1724 St. Clair occurred in December 2011, close the actual valuation date and this property is assessed 47% higher than its actual sale price.

30The Board then looked to an average of the ASR’s for those properties submitted by MPAC. As Table 2 shows, the average over-assessment is 32%. The Board calculated this average over-assessment against the value returned on the roll for the subject property (as the above calculations assume the CVA’s were as returned). The value returned on roll is $483,000 X .68 = $328,440. The reduction in this apportioned CVA results in the following:

As returned on the roll: Reduced to:

Commercial class: $120,000 (X .68 =) $ 81,600

Residential class: $363,000 (X .68 =) $246,840

Total: $483,000 $328,440

31The Board has made a finding to support the Appellant’s argument that he is over-assessed, but Mr. Capocci did not provide any evidence to the Board to support his opinion that $254,000 might be a correct value.

32From the above the Board finds that a correct current value for the subject is $328,440.

Regarding s. 44.(3)(b) - Equity

33The Board having determined current value, is then required to have reference to the assessment of similar properties in the vicinity and to reduce the assessment of the subject property, if required, to make it equitable with their assessments. The Board's task is not to determine the overall accuracy of MPAC's model, but to determine how it has performed with regard to similar property in the vicinity.

34MPAC provided an Equity Analysis (included in Exhibit 1) with 21 sales reported to be in the same vicinity. It shows the ASR’s range from .054 to 1.37 and concludes that MPAC is correctly assessing the properties in the area with a median ASR of 1.01.

35The Board notes, that MPAC’s Equity Analysis has included properties with different property codes to the subject and they might not be considered “similar” and interestingly, this analysis omits two properties of the five properties included in the sales investigation report (above paragraph 21). The missing properties, with sales, have an ASR of 1.45 and 1.47 and if included in the report would result in a median considerably higher than 1.01.

36The Appellant provided no argument or evidence with respect to the equity of his assessment.

37For reasons above, the Board has found no evidence to support that the assessment of the subject property should be reduced below the current value.

38The decision of the Board is to reduce the assessment of $483,000 to $328,440 for the 2013 and 2014 taxation years.

Regarding the Appellants Issue that MPAC has failed to prove the property values have increased in value since the last CVA

39The Board directs the Appellant to the Act that defines the responsibility of MPAC to prove the current value is correct :

40.(17): 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. 2008, c. 7, Sched. A, s. 11.

40Paragraph 15 above defines current value as stated in the Act. Nowhere does the Act direct or obligate MPAC to show increases or decreases in market values from one assessment base year to another. Further the Board has no jurisdiction to order MPAC to complete such a study/report.

2015 DEEMED APPEAL

41An 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 2014 appeal before March 31, 2015. For that reason, this decision also applies to the 2015 taxation year.

42Section 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.