Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: January 15, 2016
Assessed Person(s): Suzan Jenkinson, Philip John Jenkinson and Lee Whitman
Appellant(s): Philip John Jenkinson
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16
Respondent(s): City of Orillia
Property Location(s): 80 Orchard Point Road
Municipality(ies): City of Orillia
Roll Number(s): 4352-010-113-12812-0000
Appeal Number(s): 3063296 and 3087607
Taxation Year(s): 2014 and 2015
Hearing Event No. 590129
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: June 30, 2015 in Orillia, Ontario
APPEARANCES:
| Parties | Counsel+/Representative |
|---|---|
| Susan Jenkinson and Philip John Jenkinson | Philip John Jenkinson |
| Lee Whitman | Philip John Jenkinson |
| MPAC | Tammy Woods |
| City of Orillia | No one appeared |
DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES
INTRODUCTION
1The subject property is a residential condominium unit constructed in 2011 with a view of the narrows of Lake Simcoe. This second floor 1,407 square foot unit has an open balcony. MPAC’s evidence is that its valuation model additionally includes a 15% upward adjustment to account for the value added by virtue of the property having a good water view.
2Philip John Jenkinson and Suzan Jenkinson sold the subject property to Lee Whitman in October 2014. Mr. Jenkinson represented himself and Mrs. Jenkinson as owners of the property for the 2014 appeal, and he also represented Ms. Whitman for the 2015 taxation year appeal.
3The subject property is assessed by the direct sales comparison approach. For taxation years 2014 and 2015 the assessment was returned pursuant to the Assessment Act (“Act”) at $420,000.
4The Assessment Review Board (“Board”) in accordance with s. 44.(3) of the Act must determine if the assessment for 2014 taxation year reflects correct current value as of the legislated valuation day, January 1, 2012, and if it is equitable, having reference to the assessments of similar lands in the vicinity.
DECISION
5The Board finds that the current value of the property is $440,000 for both taxation years. The Board also finds that an assessment at the current value as found is not equitable with the assessments of similar lands in the vicinity and a reduction below current value is required to achieve equity. The assessment for the subject property is reduced from $420,000 to $401,000 for the 2014 and 2015 taxation years.
Legislation
6For the 2014 and 2015 taxation years, in determining the value at which land shall be assessed, the Board must consider the following provisions of the Assessment Act (“Act”).
7Section 1 of the Act defines "current value" as follows:
“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.
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 19.2(1) 2 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:
For the 2006, 2007 and 2008 taxation years, land is valued as of January 1, 2005.
For the period consisting of the four taxation years from 2009 to 2012, land is valued as of January 1, 2008.
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.
10Section 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.
11Section 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.
12Section 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.
Determination of Current Value
Case for MPAC
13Tammy Woods, appearing for MPAC, presented in support of the assessment as returned Exhibit 1 consisting of an MPAC report which included a location and current value study map, a current value study with the subject property and five comparable sales, a time adjustment factors table, a sales for price changes over time schedule, and an equity analysis study.
14Details of each property on Current Value Study are summarized in Table 1:
Table 1
| Sale | Address | Assessment | Sale Date | Sale/ Adjusted Sale ($) | Unit Size (sq. ft.) | Year Built |
|---|---|---|---|---|---|---|
| Subject Property | 80 Orchard Point Road #204 | 420,000 | October 2014 | 444,000/ 439,560 | 1,407 | 2011 |
| Sale 1 | 80 Orchard Point Road #303 | 485,000 | July 2014 | 545,000/ 534,100 | 1,601 | 2011 |
| Sale 2 | 80 Orchard Point Road #308 | 287,000 | August 2014 | 320,000/ 316,800 | 1,010 | 2011 |
| Sale 3 | 80 Orchard Point Road #503 | 523,000 | August 2014 | 585,000/ 573,300 | 1,751 | 2011 |
| Sale 4 | 80 Orchard Point Road #507 | 287,000 | January 2013 | 310,000/ 329,840 | 1,010 | 2011 |
| Sale 5 | 80 Orchard Point Road #604 | 332,000 | August 2014 | 368,000/ 360,640 | 1,032 | 2011 |
15Ms. Woods stated that like the subject property, Sales 1, 3, and 5 also benefit from a positive 15% adjustment in the multiple regression model for water view. The assessor stated that the five suggested comparables are considered by MPAC to be similar to the subject property on the basis of location, size, and utility. For those reasons, she testified that the assessment at $420,000 is reflective of current value as required by s. 19.(1) of the Act.
16Ms. Woods testified that MPAC’s records indicate that the subject property sold for $444,000 in October 2014.
Case for the Appellant
17Mr. Jenkinson, submitted Exhibit 2 consisting of a booklet containing his arguments. He argued that the sales agreement for the subject property transpired sometime in 2010, that he and his wife, moved into the unit in 2011, and that the sale closed in January 2012. The Appellant testified that he purchased the property for $402,000. He argues that the purchase price is evidence supporting a current value assessment for the subject property for the 2014 and 2015 taxation years, of $402,000.
Board’s Analysis of Current Value
18The best indicator of current value is an arm’s length and market-tested sale of the subject property on the valuation date, January 1, 2012, or close to it.
19Mr. Jenkinson argues that the sale of his property was negotiated for $402,000 and that MPAC should accept that value as the market tested value to assess the property for the 2012 base year. The Board disagrees with the Appellant because the sale at $402,000 was negotiated in 2010, a date too far removed from the valuation day without evidence of a time adjustment. In this case the appeals are for 2014 and 2015 taxation years which assessments have a valuation day of January 1, 2012.
20As for the subject property’s sale to Ms. Whitman for $444,000 in October 2014, this sale is also too far removed from the valuation day of January 1, 2012 to consider without a time adjustment. MPAC has however calculated a time adjusted sale price of $439,560 which supports a current value for the subject property of $440,000. This evidence suggests that MPAC’s returned assessment is below current value.
21The second best indicator of current value is the sale of similar properties in the vicinity on or close to valuation day.
22Mr. Jenkinson did not present any sales evidence. The Board turns to MPAC’s sales evidence, and rejects sales two and four. These properties do not have a water view and the Board finds that they are not comparable to the subject property because they have a different marketability from the properties with water view. Also rejected is sale five because this unit is considerably smaller than the subject property.
23Good evidence is found in sale one and sale three, these properties like the subject property have a water view; and are identical in, quality and age. The property in Sale 1 is a corner unit. Ms. Woods testified that MPAC’s multiple regression model allows 2% upward adjustment for corner units. To make the Sale 1 property comparable to the subject property the Board makes the following adjustments
Sale 1 –
Time adjusted sale
$534,100
Less 2% adjustment for Corner unit
$ 10,682
Sale per square foot
$523,418
$326.93 per sq. ft.
24The best evidence before the Board is found in MPAC’s sales one and three, and in the time adjusted sale pf the subject property. The average sales price per square foot for Sale 1 and 3, adjusted for time and differences corner unit differences, is $327.17. The Board finds that the October 2014 sale of the subject property results in a sale price per square foot of $312.41. Based upon this evidence that Board is satisfied that $440,000 (rounded) being the time adjusted sale price of the subject property is a reasonable current value for the subject property.
Equity Analysis
25Section 44.(3)(b) mandates and directs that after determining current vale, the Board shall have reference to the value at which similar lands in the vicinity are assessed. The Assessment to Sales Ratio (“ASR”) is determined by dividing the assessment as returned by the time adjusted sale price. An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below values determined in the market place. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above values determined in the market place.
26Mr. Jenkinson presented no equity arguments.
27MPAC relied on the five sales in the subject property’s complex to determine whether properties are assessed at or close to their current values. The average ASR for the five properties is 0.91. The median ASR for the sold properties is 0.91, which is below the generally acceptable range of 0.95 -1.05. The Board relies upon the ASRs of these properties, and finds that an assessment at the current value as found above is not equitable for the reason that similar lands in the vicinity’s are assessed below their current values. The Board will reduce the assessment below current value to make it equitable with the assessment of similar lands in the vicinity to $401,000 (0.91x$440,000).
CONCLUSION
28The assessment is reduced from $420,000 to $401,000 for 2014 and 2015 taxation years.
“Cristina Marques”
CRISTINA MARQUES
MEMBER
Assessment Review Board
A constituent tribunal of Environment and Land Tribunals Ontario
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```