Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 27, 2016

FILE NO.: WR 137842

Assessed Person(s): Heidi Ingrid Eicher

Appellant(s): Heidi Ingrid Eicher

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 07

Respondent(s): Township of Minden Hills

Property Location(s): 1105 Grace Road

Municipality(ies): Township of Minden Hills

Roll Number(s): 4616-032-000-63700-0000

Appeal Number(s): 3116458, 3116459 and 3145971 (deemed 2016 appeal)

Taxation Year(s): 2014, 2015 and 2016 (deemed appeal)

Hearing Event No. 608029

Legislative Authority: Sections 34 and Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: December 7, 2015 in Minden, Ontario

APPEARANCES:

Parties

Counsel⁺/Representative

Heidi Ingrid Eicher

Self-represented

MPAC

Mary Hennessey

Township of Minden Hills

No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a seasonal/recreational dwelling – first tier – on water located at 1105 Grace Road, Minden Hills.

2The subject property is situated on a lot with a water frontage of 158 feet and a depth of 295 feet for an effective site area of 46,610 square feet.

3A new building was constructed on the site in 2014. As a result of the construction of the building a supplementary assessment for the taxation year 2014 in the amount of $597,000 was added to the current value for the subject property commencing May 24th, 2014.

4The assessment of the subject property for the 2014 taxation year was $1,041,000 broken down as follows:

a. Land Value: $444,000

b. New Building Value: $597,000 (effective May 24th, 2014)

5The assessment of the subject property for the taxation year 2015 is $1,041,000.

a. As a result of an inspection MPAC, agreed to reduce the assessment from $1,041,000 to $918,000.

ISSUE

6The issue before the Assessment Review Board (“Board”) is to determine whether the subject property has been assessed too high.

DECISION

7The Board finds that the current value of the subject property is $806,000.

8The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

9Accordingly, the assessment for the subject property for the taxation years 2014 (effective May 24, 2014) and 2015 is reduced from $1,041,000 to $806,000 broken down as follows:

• Land Value: $444,000

• Building Value: $362,000 (Commencing May 24, 2014)

• Total Value: $806,000

10The Board finds that for the taxation year 2014 commencing May 24, 2014 the supplementary assessment is reduced from $597,000 to $362,000.

11The Board finds that for the taxation year 2015 the assessment is reduced from $1,041,000 to $806,000.

REASONS FOR DECISION

The Legislation

12For the 2014 and 2015 taxation years, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

13Section 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.

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.

15Section 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:

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.

16Section 34 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;

(b) land or a portion of land ceases,

(i) to be exempt from taxation,

(ii) to be farm lands the current value of which is determined in accordance with subsection 19 (5),

(iii) to be conservation land or managed forests land the current value of which is based on current use under subsection 19 (5.2),

(iii.1) to be land in the managed forests property class the current value of which is determined under subsection 19(5.2) or (5.2.1),

(iv) to be land the current value of which is based on current use under regulations made under subsection 19 (2), or

(v) to be classified in a subclass of real property;

(c) Repealed: 1997, c. 5, s. 22 (1).

(a) a pipeline increases in value because it ceases to be entitled to the reduction provided for in subsection 25(9),

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.

(i) to be land the current value of which is based on current use under regulations made under subsection 19(2), or

(ii) to be classified in a subclass of real property;

17Section 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.

18Section 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.

19Section 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.

Analysis

20Under the Act the Board is required to do three things:

(1) Find the current value of the property;

(2) Make reference to the value at which similar lands in the vicinity are assessed; and

(3) Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

21The best measure of current value is an arm’s length and market tested sale of the subject property on the valuation date of January 1, 2012, or close to it. If no such transaction took place, a further measure of current value is 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 subject property. The onus for establishing the correctness of the current value lies with MPAC.

MPAC’s Evidence

22The assessor provided three suggested comparable properties as shown in Table 1.

Table 1: MPAC’s Suggested Comparable Properties

Address	Lot Frontage (Ft.)	Lot Depth (Ft.)	Year Built	Quality Class	Building Area (Sq. Ft.)	Time Adjusted Sale Amount	Sale Date
1105 Grace Road (subject property)	158.00	295.00	2013	7.5	1,767
1111 Osprey Road	160.00	999.00	2000	7.0	2,015	$896,604	06/2012
1055 Hidden Valley Lane	136.00	298.00	1990	7.0	3,159	$1,147,384	07/2011
1167 Celestial Drive	155.00	250.00	2005	7.0	1,834	$858,755	06/2012

23The assessor contends that the above three suggested properties are comparable to the subject property for the following reasons:

i. The properties are all located on water on the same lake;

ii. All the properties are of similar quality class and

iii. All three properties are residential seasonal/recreational

iv. All are located in the same neighborhood.

24The assessor stated that in her opinion, the properties located at 1111 Osprey Road and 1167 Celestial Drive are relatively comparable to the subject property because both are of similar lot and building size and both are located on the same lake.

25The assessor also stated that both of the above-mentioned properties have valid sales and were sold within six months of the valuation date of January 1, 2012 which meant that only slight time adjustments were necessary.

26The assessor informed the Board that based on a site inspection MPAC reduced the assessment to account for an equity adjustment and a negative adjustment for a downgrade in the waterfront condition from good to average.

27The assessor stated that as a result of the adjustments the assessment of the subject property was reduced from $1,041,000 to $918,000 for the taxation years 2014 and 2015.

28The assessor concluded that the revised assessment of the subject property at $918,000 falls within the range ($856,755 to $1,147,384) of the sales of the three suggested comparable properties and is therefore reasonable.

Appellant’s Evidence

29The appellant submitted the following information:

Exhibit 2:

a. Documentation on MPAC assessment and re-assessment;

b. Evidence in support of a reduction of MPAC’s assessed and re-assessed value for the property;

c. Comparison of recent sales;

d. Comparison against other properties in MPAC’s neighbourhood.

30The appellant provided a letter of opinion from ReMax North Country Realty in which the Brokers (Linda Baumgartner and Troy Austen) stated that in their opinion the subject property had a market value of $800,000.

31The appellant submitted a “Neighbourhood Properties of Interest Report” with information pertaining to 24 properties. The appellant stated that in comparing the assessed value of the 24 properties in the report to that of the subject property, the assessed value of the subject property is one of the highest which supports her position that her property is over assessed.

32The appellant provided a spreadsheet showing various details of properties in the immediate vicinity of the subject property including their assessed values. The appellant believes that the data in this document demonstrates that the value of her property as established by MPAC is over stated.

33The appellant submitted a spreadsheet titled ‘Recent Sales’ comprising the property details including sales data of several properties in the neighbourhood. The appellant believes that the sales information provided in this document establishes a Benchmark Market Value of sales in the area. In the appellant’s view, based on this Benchmark Market Value, her property is over-assessed.

34The appellant stated that the shoreline on the waterfrontage at her property was of poor quality and was not taken into account in establishing its assessed value.

35The appellant claims that in her opinion, the assessed value of the subject property should be established at approximately $818,000.

Analysis of Evidence

Analysis of MPAC’s Evidence

36The Board has considered MPAC’s evidence that the three suggested comparable properties are residential/recreational properties located on the same lake and their sales value is an acceptable indicator of the trend in market value of properties of this type and in this neighbourhood.

37The Board accepts the two properties at 1111 Osprey Road and 1167 Celestial Drive as comparable to the subject property because they are all located on the same lake, they are of similar water frontage, similar quality class, similar building size and are slightly older than the subject property.

38The Board rejects the suggested comparable property located at 1055 Hidden Valley Lane as comparable to the subject property since the building is older and is 1,392 square feet larger than the subject property and has a finished basement of 1,300 square feet while the subject property has no finished basement.

Analysis of Appellant’s Evidence

39The Board has reviewed the letter of opinion which the Appellant obtained from brokers Baumgartner and Troy of ReMax North Realty regarding their estimate of the value of the subject property. The Board is unable to give any consideration to the letter of opinion because the brokers did not provide any credible evidence pertaining to the method and criteria used to arrive at their determination of value. In addition, neither of the Brokers was present to be cross-examined.

40The Board has reviewed the details of the sales data provided by the appellant in the document titled “Recent Sales” intended to demonstrate Bench Mark Market Value. The Board rejects the sales of the nine properties as valid sales because they all occurred between October 2013 and April 2015 they are considered too far removed from the valuation date of January 1, 2012.

Determination of Current Value

41The Board agrees that the best method to determine the current value of the subject property is based on the sales of similar properties in the neighbourhood.

42The Board accepts the two properties located at 1111 Osprey Road and 1167 Celestial Drive as comparable to the subject property. The Board finds that the averages sales value per square foot of these two properties is $456.00 per square foot. When this value is applied to the subject property, it results in a current value of $805,752.

43The Board finds that the current value of the subject property is $806,000 (rounded).

Equity with Similar Lands in the Vicinity

44The Board is required under s. 44.(3) sub-paragraph (b) of the Act, to 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. For purposes of establishing equity, properties do not need to be comparable; they need to be of a similar nature and within a reasonable proximity. To determine equity the Board may look at the ASR.

45The ASR is a ratio of a property’s assessment to its sale price. If sales 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 comparable properties presented. Therefore, the review of ASRs may indicate whether MPAC has been under or over-assessing properties in the area.

46The appellant presented assessment information on several properties in the area however, 23 of the 24 properties had no evidence pertaining to sales to establish whether the properties were inequitably assessed in relation to sales. MPAC presented the sales of 30 residential properties within 5.47 kilometers of the subject property which occurred between January 2011 and December 2012. For the purpose of establishing equity the Board considers the sales between January 2011 and December 2012 as valid sales. The median “ASR” of the 30 valid sales is 0.98. A value within five percentage points is usually considered an acceptable value. In this case the median ASR of 0.98 indicates that MPAC’s methodology may be producing assessments close to sales. The Board therefore finds that no adjustment is required for equity in accordance with s. 44.(3) (b) of the Act.

CONCLUSION

47The Board finds that the current value of the subject property is $806,000.

48The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

49Accordingly, for the taxation year 2014 (effective May 24, 2014) and for the taxation year 2015 the assessment of the subject property is reduced from $1,041,000 to $806,000 broken down as follows:

• Land Value: $444,000

• Building Value: $362,000 (Commencing May 24, 2014)

• Total Value: $806,000

50The Board finds that for the taxation year 2014 commencing May 24, 2014 the omitted assessment is reduced from $597,000 to $362,000.

51The Board finds that for the taxation year 2015 the assessment is reduced from $1,041,000 to $806,000.

2016 DEEMED APPEAL

52An 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.

53Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

40.(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.