Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 6, 2016 FILE NO.: WR 138386

Assessed Person(s): Geoffrey Richard Mcleese Appellant(s): Geoffrey Mcleese Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 25 Respondent(s): Township of Georgian Bluffs Property Location(s): 162 Cobble Beach Drive Municipality(ies): Township of Georgian Bluffs Roll Number(s): 4203-580-020-40004-0000 Appeal Number(s): 3121064 and 3159070 (deemed 2016 appeal) Taxation Year(s): 2015 and 2016 (deemed appeal) Hearing Event No. 611629

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

Heard: On January 14, 2016, in Meaford, Ontario

APPEARANCES:

Parties	Representative
Geoffrey Mcleese	Self-represented
MPAC	Kathryn Hutchinson
Township of Georgian Bluffs	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

INTRODUCTION

1The subject property is a relatively new home, built in 2014, in a newer subdivision in Township of Georgian Bluffs in the Town of Kemble, Ontario. The assessment was returned in the amount of $873,000.

2This single-family detached home is located in an area of mixed seasonal/recreational homes and full-time homes such as the subject property. This area is described as a “premium neighbourhood” with views of Georgian Bay and proximity to the Cobble Beach golf course. The subject property abuts the golf course.

3The Assessment Review Board (“Board”) must determine the correct current value and the equitable assessed value of the subject property for the 2015 taxation year.

4MPAC, represented by property valuation specialist Kathryn Hutchinson, has recommended a reduction in the assessment for 2015 to $786,000 based on her analysis of comparable properties sold in the immediate area near the valuation day.

5Geoffrey Mcleese, the Appellant, argues that values in his neighbourhood have been dropping consistently, and that comparable homes to his have been selling more recently for values in the realm of $600,000.

Preliminary Matter

6Prior to the commencement of the hearing, Ms. Hutchinson advised the Board that Mr. Mcleese had also applied for a reconsideration of his 2014 assessment, and had then appealed to the Board. Ms. Hutchinson advised that an error was made by the representative, with the result that Mr. Mcleese’s appeal was dismissed without a hearing. On Mr. Mcleese’s behalf, she wondered if the 2014 appeal could be revived and added to the current proceeding.

7In this case, the Member was advised by Board staff that no record of an appeal of the 2014 assessment appears in Board records. As a result, the 2014 taxation year cannot be added to the current appeal. Rule 27 of the Assessment Review Board Rules of Practice and Procedure outlines those circumstances in which a late appeal may be filed.

DECISION

8The Board determines that the current value of the subject property is $786,000 as at the valuation day, January 1, 2012.

9The Board finds that, having reference to the value at which similar lands in the vicinity are assessed, no reduction in the assessment of land is required to make it equitable with the assessments of similar lands in the vicinity

10Accordingly, the assessment is reduced from $873,000 to $786,000 for the 2015 taxation year.

REASONS FOR THE DECISION

11The subject property is a one-and-one-quarter storey single-family detached home situated on an effective site area of 9,687 square feet (“sq. ft.”) with a frontage of 65.62 feet and a depth of 147.64 feet. It has one fireplace, four bathrooms, and a basement of 1,916 sq. ft., of which an area of 1,628 sq. ft. is finished. The main floor measures 1,916 sq. ft. and the second storey is 499 sq. ft. There is an attached garage of 652 sq. ft.

Determination of Current Value

12Section 44.(3)(a) of the Assessment Act (“Act”) requires the Board to first “determine the current value of the land”. The definition of “current value” is contained in s. 1 of the Act:

“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.

13Section 19 of the Act states that:

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

14The best measure of current value is an arm’s length and market-tested sale of the subject property on or close to the valuation day of January 1, 2012. If no such transaction took place, a further measure of current value is derived from the arm’s length and market-tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the land.

15To enable an estimate of value for the subject property to be derived from an analysis of comparable property sales, there must be sufficient elements of similarity in terms of physical factors. In single-family detached residences, factors for consideration will include the structure and quality of primary and secondary buildings, along with any advantageous locational factors. Examining a number of comparable properties in the immediate vicinity helps determine a range of values and assists in arriving at a fair current value.

16Ms. Hutchinson entered Exhibit 1, her Valuation Report for 162 Cobble Beach Drive. She selected five comparable sales of single-family residential properties in reasonably close proximity to the subject property – three on Cobble Beach Drive, one on Snowberry Lane and one on Algoma Crescent. All the homes are located in the same subdivision, although all five are older by one to three years. Based on the comparable sales and her inspection of the subject property, Ms. Hutchinson argued that the current value for the 2015 taxation year should be amended to $786,000 as opposed to $838,659.

17Ms. Hutchinson’s evidence of comparable properties included adjustments made to the sales prices to give them a value as of January 1, 2012. Time adjustment factors were calculated for each month between January 2008 and December 2012, based on 600 sales of residential properties in the vicinity, and these factors were applied to sales prices of comparable properties to give an adjusted value to January 1, 2012. While this does not provide the accuracy of a sale occurring on or near the valuation day, in a case like this one, where very little evidence was available of sales occurring near January 1, 2012, the Board will accept time-adjusted sales. On the chart below, time-adjusted sales (“TAS”) figures are shown in italics. They are not currently available for sales occurring after 2012.

18The following Table sets out the main points of comparison introduced by Ms. Hutchinson between the five sales and the subject property. All six properties have attached garages, although the subject property’s attached garage is over 100 sq. ft. larger than the garages in Sales A, D and E, and somewhat larger than the garages in Sales B and C.

TABLE 1 (All measurements in square feet)

Address	Site Area	Building Area	Finished Bsmt. Area	Year Built	Sale Date	Sale Price	Abuts Golf
Subject	9,687.52	2,415	1,628	2013			Yes
202 Snowberry (A)	9,506.90	1,598	799	2010	2010/10	$476,806 TAS:$488,160	Yes
160 Cobble Beach (B)	9,691.39	2,067	1,034	2010	2011/05	$851,329 TAS:$861,032	Yes
178 Cobble Beach (C)	9,687.52	2,167	0	2010	2010/03	$760,952 TAS:$788,899	Yes
179 Cobble Beach (D)	11,934.38	1,801	0	2012	2013/04	$459,292	No
409 Algoma (E)	14,098.35	2,116	0	2010	2010/06	$727,159 TAS:$749,856	No

19Because the valuation day is January 1, 2012, the Board prefers comparable sales evidence close in time to that date. In this case, MPAC comparable sales took place in all but one example over a year away in time from the valuation day. This makes it difficult to make accurate comparisons unaffected by market changes. It is clear from the evidence presented by both parties that the market for homes in this subdivision has been falling since the valuation day. However, in order to ensure that assessments are fair, the Board must strive to keep the assessment of current value current to the valuation day.

20The Appellant introduced Exhibit 2, which was an excerpt from “My Neighbourhood Properties of Interest”. The comparable properties showing evidence of sales were 155 Cobble Beach (sold in October, 2015) and 178 Cobble Beach (sold in December, 2014). Both sales took place over two years from the valuation day and the Board finds this evidence not current enough with the valuation day to provide assistance.

21Mr. Mcleese also introduced Exhibit 3, an appraisal of his property effective July 9, 2014. The appraiser valued the home as of that date in the amount of $680,000 using the cost approach and $670,000 using the comparative sales approach. However, both valuations are not current to the valuation day and, while they reflect the market trend over two years later, they do not reflect an applicable value on January 1, 2012. In addition, the appraiser used comparable sales of residential properties which were not located in Kemble but in Sarawak and Owen Sound. In the result, MPAC’s evidence of comparable sales, reflecting property sales from the same subdivision as is the subject property, is the better evidence of current value.

22The best evidence of current value is found in MPAC’s Sales B and C: 160 and 178 Cobble Beach Drive. Sale B took place seven months prior to the valuation day, and it is a property located on a lot of almost identical size to the subject property which also abuts the golf course. Sale C’s lot is the same size as the subject property’s lot. Both of these comparable sales are one storey dwellings with fireplaces but lacking the number of bathrooms found in the subject property. Sale B has a smaller finished basement than the subject; Sale C has a large unfinished basement. Sales B and C are both slightly smaller dwellings over all, and both were built in 2010 or three years before the subject property was built. Their selling prices were higher than the value recommended by MPAC for the subject property, and yet the subject property as a newer and slightly larger home in the same neighbourhood would not reasonably be assessed much lower than these two comparable properties.

23These sales confirm the recommended value given to the subject property by Ms. Hutchinson in the amount of $786,000.

Equity

24Following its determination of the current value of the subject property, s. 44(3)(b) of the Act requires the Board to lower the assessment below current value if necessary in order to make the assessment of the subject property equitable with the assessments of similar properties in the vicinity. The section states that:

…the Board shall…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 land.

25Mr. Mcleese presented no evidence on this issue. Ms. Hutchinson provided an Equity Analysis based on 30 sales of residential properties within 3 kilometres of the subject property. The Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property, as determined above requires an adjustment in accordance with s.44.(3)(b) of the Act.

CONCLUSION

26The Board determines that the current value of the subject property is $786,000 as at the valuation day, January 1, 2012.

27The Board finds that, having reference to the value at which similar lands in the vicinity are assessed, no reduction in the assessment of land is required to make it equitable with the assessments of similar lands in the vicinity

28Accordingly, the assessment is reduced from $873,000 to $786,000 for the 2015 taxation year.

2016 DEEMED APPEAL

29An appeal for the 2015 taxation year is presently before the Board. Section 40.(26) of the Assessment Act 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 2015 appeal before March 31, 2016. For that reason, this decision also applies to the 2016 taxation year.

30Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) 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.