Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

March 3, 2016

FILE NO.:

WR 138486

Assessed Person(s):

Bruce Edmund Beacham and Pamela Jean Beacham

Appellant(s):

Bruce Edmund Beacham and Pamela Jean Beacham

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s):

City of Burlington

Property Location(s):

3294 Lakeland Crescent

Municipality(ies):

City of Burlington

Roll Number(s):

2402-070-712-02500-0000

Appeal Number(s):

3120240

Taxation Year(s):

2014

Hearing Event No.

613043

Legislative Authority:

Section 34 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard:

January 29, 2016 in Burlington, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

Bruce Edmund Beacham and Pamela Jean Beacham

Self-represented

MPAC

Olga Avdeeva

City of Burlington

Sandra Chau (Observing only)

DECISION OF THE BOARD DELIVERED BY TYRONE D. SKANES

INTRODUCTION

1The appeal before the Assessment Review Board ("Board") is a s. 34 of the Assessment Act ("Act") in respect of a supplementary assessment effective March 7, 2014 of a newly built home located at 3294 Lakeland Crescent (“subject property”).

2The subject property, at the beginning of 2014 was vacant land on water with an effective frontage of 180 feet ("ft.") and an effective depth of 220 ft. for a total land area of 26,136 square feet ("sq. ft."). The current value assessment was $1,700,000 but at the Request for Reconsideration ("RFR") stage this value was reduced to $1,615,000.

3The parties agree there is no dispute as to the current value of the subject property at $1,615,000 as of the valuation date of January 1, 2012.

4The Appellants built a new home on the property that measured 4,764 sq. ft., with 2,477 sq. ft. on the main floor and 2,287 sq. ft. on the second floor. There is an unfinished basement measuring 2,477 sq. ft. and an attached garage measuring 925 sq. ft. The building is rated as a Quality Code 8. A negative 1% adjustment was given for the property being a corner lot.

5On March 7, 2014 a s. 34 supplementary assessment of $1,793,000 was issued for the value of the improvements. MPAC subsequently offered to reduce the s. 34 assessment to $1,516,000. MPAC's combined offer of the land value at $1,615,000 and the building improvements at $1,516,000 resulted in a total recommended assessment of $3,131,000. The Appellants rejected this offer.

6Olga Avdeeva, representing MPAC, said that she believed that the revised s. 34 assessment is fair and reasonable and requested that the Board reduce the assessment to $1,516,000 from $1,793,000 as of March 7, 2014.

7Bruce Beacham, representing the Appellants, said that in comparison to the other homes in the immediate area his home, although a new construction, was not on par but still had one of the higher assessments. He said that he believed that the total current value assessment for the subject property ought to be $2,470,000 which would result in reducing the supplementary assessment to $855,000.

ISSUES

8The Board has to determine two issues. First, what is the s. 34 assessment apportionment as of March 7, 2014 and second, is the value equitable with the assessment of similar lands in the vicinity.

DECISION

9The Board finds that the s. 34 supplementary assessment is $1,432,000 as of March 7, 2014 and that amount is equitable with the assessments of similar lands in the vicinity.

REASONS FOR DECISION

Relevant Legislation

10Section 19.(1) of the Act states:

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

11Section 1 of the Act states:

“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.

12Section 19.2(1) of the Act states:

Valuation days

19.2 (1) Subject to subsection (5), 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.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

13Section 34.1 of the Act states:

34(1) Supplementary assessments to be added to collector’s roll. – 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;

the assessor may make the further assessment that may be necessary to reflect the change, and the clerk of the municipality upon notification thereof 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.

14Section 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

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.

15Section 40.(17) of the Act states:

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.

16Section 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.

MPAC's Position and Evidence

17Ms. Avdeeva reiterated her earlier comment that there was no dispute as to the current value at $1,615,000 as of the valuation date.

18Ms. Avdeeva entered a valuation report into evidence as Exhibit 1. She described the subject property and advised that she wished to correct the building measurement for the structure. She said that a colleague had inspected the home, post-construction, and determined that the initial measurement of 4,924 sq. ft. was incorrect. The actual measurement was 4,7764 owing to the second floor having been incorrectly measured.

19The valuation report lists the time adjusted sales ("TAS") of four properties. Ms. Avdeeva submitted that those sales indicate that the recommended current value assessment is reasonable and correct. She said that, in her opinion, Sale B was the most comparable property to the subject property and its assessment was higher than that offered to the Appellants.

20Ms. Avdeeva entered an equity study into evidence as Exhibit 2. She testified that her investigation revealed that the median Assessment to Sales Ratio ("ASR") was 1.03, within the range of 0.95 to 1.05, which MPAC considered acceptable in determining whether similar properties in the vicinity were being assessed at their correct current value. She opined that, based on her findings, they were and that an adjustment for equity was not required.

Appellants' Position and Evidence

21Mr. Beacham entered a documentary package into evidence as Exhibit 3. He said that it did not make sense that, although his house was newly constructed, it was assessed higher than two of the four homes that MPAC had as comparable properties. He said that although the subject property was a very nice home it was finished in more of a cottage style with inferior furnishings such as cupboards and flooring. He advised that he had been in some of the homes MPAC was using as comparables and they were far more appealing, as they were finished with the best materials. He said his neighbours appeared unimpressed with how the subject property was finished.

22Mr. Beacham also said that he disagreed with MPAC not factoring in landscaping and other property improvements, such as boat docks. He said that all of these comparable properties had beautiful grounds that were professionally finished and maintained. He also advised that the property he was using as comparison, at 3284 Lakeland Crescent, had a concrete retaining wall at the waterfront, a concrete dock and boat railway for easy boat access and storage and a large pool that was surrounded by a glass wall enclosure.

23Mr. Beecham also presented two other properties for comparison but they were common properties used by MPAC as Sales A and B. He said that both of these properties are far superior to the subject property, as the basements are finished, the lands are professionally landscaped and as demonstrated by the pictures he provided, these properties have exteriors that are fully completed with cut stone. He said he disagrees strongly with MPAC not considering landscaping as there has to be some consideration for "curb appeal".

24Mr. Beacham said that he believed that the subject property's assessment ought to be $2,470,000 when compared to the May 2015 sale price of $2,600,000 for 3284 Lakeland Crescent. He said that he estimated a 5% value increase in properties between March 2014 when the subject property was built and May 2015 when this property sold. He said he deducted the 5% from the sale price of 32 Lakeland Crescent to arrive at $2,470,000. Mr. Beacham believes that this value is fair for the subject property.

Board's Deliberations

25The best evidence of current value is the sale of the subject property if the sale meets the definition of current value on or near the valuation day. When no such sale occurs, the Board looks to the sale of similar properties in the vicinity to determine current value.

26The Board has carefully considered the testimony of the parties and the documentary evidence tendered as exhibits.

27The Board, when comparing properties, does not expect exactness or sameness. Therefore, the Board looks at similarity of characteristics, amenities and location to determine comparability.

28The Board usually considers sales of comparable properties that have occurred within one year on either side of the valuation date as the ideal time period for consideration. The Board occasionally does extend the time period for considering comparable properties when the parties have demonstrated that there are an insufficient number of relevant sales during the ideal time period.

29MPAC entered four properties for consideration. Sales C and D occurred within the ideal time period. Sale A took place in August 2009 and Sale B occurred in June 2010.

30The parties agreed that these properties are unique in value and location and comparable sales in the ideal time period were difficult to find. The assessor developed time adjustment factors to enable the sale prices to be time adjusted to the valuation date. The Board accepts the parties position that finding a suitable number of similar properties is difficult owing to their unique nature. Therefore, the Board will consider these four properties.

31The Appellant entered three comparable properties with two of them being in common with MPAC's Sales A and B.

32The Appellant's third property was a May 2015 sale of 3284 Lakeland Crescent and he recommended that the Board use this sale as a basis for comparison. However, as the Board's stated in its opening remarks, the value of the properties to be considered for comparison must be based on the valuation date of January 1, 2012. The May 2015 sale of the 3284 Lakeland Crescent property could not be time adjusted to the valuation date and the Appellant did not present any evidence to support his assertion that there had been a 5% change in the sales market between the construction date of the subject property and the sale date of the comparable property. Therefore, the Board will not consider this property.

33The Board, in determining the s. 34 assessment, will use the combined land and building improvement assessment of $3,131,000 for the subject property, owing to the fact that the parties did not apportion the values of the properties submitted for consideration. Therefore, once the total value has been determined the Board will subtract the land portion of $1,615,000 from that total to determine the s. 34 assessment.

34As shown in Table 1 below, the Board listed the main features of the acceptable sales comparables. After considering the information in Table 1, the testimony of the witnesses, photographs, maps and other information in evidence, the Board makes a finding as to whether the sales comparables are relatively comparable, inferior or superior to the subject property (last column).

Table 1

Property

Returned Assessment

TAS Price

Effective Site Area ("sq. ft.")

Building Area ("sq. ft.")

Year Built

Quality Code

Relatively Comparable Inferior or Superior

Subject

$3,131,000

N/A

26,136

4,764

2014

8.0

N/A

Sale A

$3,470,000

$3,958,382

26,136

5,889

1994

8.5

Superior

Sale B

$3,265,000

$3,368,982

22,215

4,879

1986

9.0

Superior

Sale C

$2,872,000

$2,599,019

31,798

4,938

1953

7.0

Inferior

Sale D

$2,235,000

$2,725,915

16,552

4,580

1946

7.5

Inferior

35The Board grouped the TAS prices into two TAS ranges as shown in Table 2 below. The first group lists the TAS range for the inferior properties. The second group lists the TAS range for the superior properties. These two groups establishes the subject property's TAS range.

Table 2

TAS Range for the Inferior Properties - Sales D & C

TAS Range for the Subject Property

TAS Range for the Superior Properties - Sales B & A

←$2,599,019 $2,725,915→ $2,725,915 →

←$2,725,915 $3,368,982→

←$3,368,982 $3,958,382→ $3,958,382 →

36The Board determined that two of the properties were superior to the subject property and two were inferior to the subject property. The Board is of the opinion that the subject property's current value ought to be lower than that of the lowest superior property, namely Sale A and higher than the highest value of the inferior properties, namely Sale C. The Board determined that the mid-point of these values is $3,047,448 or $3,047,000(rounded). The Board subtracts the land portion of the subject property of $1,615,000 from $3,047,000 to obtain a s. 34 supplementary assessment value of $1,432,000.

37The Board accepts MPAC's unchallenged equity study that found the median ASR to be 1.03 and finds that an equity adjustment is not required.

CONCLUSION

38The s. 34 assessment for the subject property as of March 7, 2014 is reduced from $1,793,000 to $1,432,000 and that value is equitable with assessments of similar lands in the vicinity.