Maffei v. Municipal Property Assessment Corporation, 2016 CanLII 12959

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

March 10, 2016

FILE NO.:

WR 138788

Assessed Person(s):

Joseph Francis Maffei

Appellant(s):

Vincent Maffei

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 9

Respondent(s):

City of Toronto

Property Location(s):

7 Geranium Court

Municipality(ies):

City of Toronto

Roll Number(s):

1908-094-290-05609-0000

Appeal Number(s):

3062528 and 3079584

Taxation Year(s):

2014 and 2015

Hearing Event No.

610541

Legislative Authority:

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

Heard:

February 10, 2016 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Joseph Francis Maffei

Vincent Maffei

Vincent Maffei

Vincent Maffei

MPAC

D. Samuels

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY MEMBER S. LIGHT

ISSUE

1The subject property municipally known as 7 Geranium Court is a newly constructed two storey single-family detached house located in the City of Toronto. It is located on an irregularly shaped lot with an effective frontage of about 43 feet and an effective depth of about 97 feet. The house was constructed in 2012 and the quality of its construction is rated as 8.5. It has a basement garage and a finished basement of about 1,282 square feet. The total building area of the first and second floors is 3,435 square feet.

2MPAC returned the assessment for the 2014 and 2015 taxation years at a value of $1,622,000. After a further inspection of the property and a review of comparable sales MPAC is recommending a reduction of the assessment to $1,465,000 for these years.

3The representative for the Appellant argues that the assessment as returned and the recommended assessments are too high. He argues that assessment for both years should be reduced to $950,000.

4The Assessment Review Board (“Board”) must determine whether the 2014 and 2015 assessments are correct and equitable.

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 is $1,427,000.

6The Board finds that a further reduction in assessment in the current value pursuant to s. 44.(3)(b) of the Act based on equity considerations would not be appropriate in the circumstances .

7Accordingly, the assessment of the subject property for the 2014 and 2015 taxation years is reduced to $1,427,000.

REASONS FOR DECISION

Legislation

8Section 19.(1) of the Act states:

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

9Section 1 of the Act defines “current value” as:

“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.

10Section 19.2(1)2 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.

11Section 44.(3) 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.

12Section 40.(26) of the Act directs:

40.(26) 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.

Current Value Analysis

13Greg Tom is a property valuation analyst with MPAC and was called by Mr. Samuels representing MPAC, as the witness for MPAC. He inspected the subject property on May 21, 2015. He also reviewed the sales of other homes constructed around the same time located in the same subdivision on the Geranium Court cul-de- sac. He narrowed down his list of comparable properties to the sales of 3 and 5 Geranium Court. These properties were constructed in 2011, and like the subject property at 7 Geranium Court, have around 40 feet of effective frontage, about 100 feet of effective depth and slightly more than 3,400 square feet of total building area divided about equally between the first and second floors. They have finished basements of about 1,100 square feet and basement garages. They were sold at time adjusted sale prices of $1,388,588 and $1,465,174 respectively. The main difference between these properties and the subject property is that their lot sizes are a little larger and more regular in dimensions than that of the subject property.

14Mr. Tom relies on the suggested comparable at 5 Geranium Court as being the most comparable to the subject property. It is located right next to the subject property and sold within two years of the valuation date, so the purchase price required slightly less adjustment than the sale price of 3 Geranium Court two doors away from the subject property that sold three months prior. However, the Board prefers to rely on the average sale price of 3 and 5 Geranium Court rather than relying on a single sale to determine current value. Furthermore, based on the listing information submitted by the Appellant for these suggested comparables, their layouts appear to be identical. Therefore the Board has determined the average adjusted sale to be $1,427,000 (rounded) and the current value of the subject property should be reduced to this amount.

15Vincent Maffei argued that the assessment should be determined based on a cost approach by adding the 2012 phased in assessed value of the land of $426,000 to the cost of constructing the dwelling which he testified to be $437,000 resulting in a total assessment in his estimation of around $950,000. However, the definition of current value in the legislation referred to above requires the Board to consider what a buyer would pay for the property. The sale prices of comparable properties are the best indicators of this amount. In any case, the assessed value of $426,000 that he relied on for land value reflected the phased in value in 2012 from the prior 2008 valuation cycle.

16Mr. Maffei also argues that the construction of the subject property had not in fact been sufficiently completed in 2012 to permit the issuance of an occupancy permit thereby diminishing the potential sale value of the subject property. However, he did not provide information to Mr. Tom or the Board respecting either the relevant “costs to cure” that would enable the issuance of an occupancy permit or the cost to complete the house in accordance with the building plans. Therefore, the Board does not have the required information to make any adjustments in these respects.

17Mr. Maffei also argues that the irregular shape of the subject property reduces its value relative to the suggested comparable sales and makes it much more difficult to sell. However, he has not provided the Board with any quantifiable empirical evidence in support of this assertion.

Equity Analysis

18Mr. Tom presented an equity analysis demonstrating that the sales in the vicinity of the subject property have a median assessment to sales ratio of 1.04.

19The Board finds that there is no basis to reduce the assessment any further on the basis of equity pursuant to s. 44.(3)(b) of the Act.