Beverly Anne Baird v. Municipal Property Assessment Corporation, 2016 CanLII 33710

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

June 3, 2016

FILE NO.:

WR 136086

Assessed Person(s):

Beverly Anne Baird

Appellant(s):

Beverly Anne Baird

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 7

Respondent(s):

Township of North Kawartha

Property Location(s):

Plan 4 Hewson’s Plan of

Municipality(ies):

Township of North Kawartha

Roll Number(s):

1536-020-003-00510-0000

Appeal Number(s):

2997992, 3018888, 3073659 and 3145970 (deemed 2016 appeal)

Taxation Year(s):

2013, 2014, 2015 and 2016 (deemed appeal)

Hearing Event No.

598151

Legislative Authority:

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

Heard:

October 1, 2015 in Apsley, Ontario

APPEARANCES:

Parties

Representative

Beverly Anne Baird

Stuart Baird

MPAC

Rebecca Bolton

Township of North Kawartha

No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is vacant residential/recreational land on water with a lot that is 1.2 acres that has an effective frontage of 250 feet. This subdivided island is located on Stoney Lake.

2For taxation years 2013, 2014 and 2015 the assessment was returned pursuant to the Assessment Act, R.S.O. 1990, c. A.31, as amended (“Act”) at $302,000.

3Rebecca Bolton, appearing for MPAC, indicated that the subject property has been valued using the sales comparison approach, and submitted the sales of two properties which sold in the open market, in arm's length transactions, for time-adjusted sale prices of $399,251 and $461,712. She submits that this evidence supports the assessment as returned for all taxation years as being reflective of current value as required by s. 19.(1) Act.

4Stuart Baird, the spouse of the owner of the subject property, takes the position that the assessment is still too high based on the utility, and location of the subject property, and that a more reasonable assessment of the subject property is $190,000.

5The Assessment Review Board (“Board”) must determine the current value for 2013, 2014 and 2015 taxation years. The Board must also determine whether this value is equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

6The Board finds that the correct current value is $264,000 (rounded), and that this value does not require a further adjustment to make it equitable with the assessments of similar lands in the vicinity. The Board reduces the assessment from $302,000 to $264,000 for the 2013, 2014 and 2015 taxation years, and for the deemed 2016 taxation year.

REASONS FOR DECISION

Legislation

7The Board must have regard to s. 1, s. 19.(1), s. 19.2(1), s. 40.(17), s. 40.(19), s. 44.(3) (a) and (b) of the Act when determining whether or not the assessment under appeal is correct.

8Section 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.

9Section 19.(1) of the Act states:

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

10Section 19.2(1) of the Act states:

19.2 (1) Valuation days. – 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.

(5) Exception. – 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 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.

13Section 44.(3)(a) and (b) 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.

Board’s Analysis

Current Value

14The best indicator of current value is an arm’s length and market-tested sale of a property on the valuation date, January 1, 2012, or close to it. Since the subject property did not sell, the Board relies upon the sale of similar properties in the vicinity on or close to the valuation day to determine if the sales evidence suggests that current value requires correction.

15Ms. Bolton, in support of the assessment as returned, presented Exhibit 1 consisting of a current value study with two comparable properties and a location map; a study of price changes over time and a time adjustment factors table; and an equity analysis.

16The assessor identified two sales, both vacant lands located on Stoney Lake. The proposed comparables are considered by MPAC to be similar to the subject property on the basis of utility and lot size. Details of each property in the Current Value Study, together with the uncontested information respecting the subject property are summarized in Table 1:

Table 1

Address

Assessment ($)

Sale Date

Sale/Adjusted Sale ($)

Lot size (frontage/acres)

Subject Property

Isl 105 Stoney Lake

302,000

N/A

N/A

Front 250/ 1.20

Sale A

Isl 21 Stoney Lake

541,000

Aug. 2011

455,000/ 461,712

Front 596/ 2.19

Sale B

Isl 29 Stoney Lake

322,000

Aug. 2012

413,000/ 399,251

Front 500/ 1.15

17The assessor stated that the suggested comparable properties are considered by MPAC to be good evidence of values of vacant land sales in the vicinity, and accurately reflect the value of the subject property, as required by s. 19.(1) of the Act.

18Ms. Bolton submits that the sales require time-adjustments, providing the Board with MPAC’s analysis of 490 sales in the same area as the subject property between December 2008 and December 2012. She stated that this study demonstrates that properties in this general area experienced an overall increase of approximately 10.45% in the real estate market over that period. Time adjustment factors for each month during the study period were provided together with the data for the 490 sales analyzed.

19During cross-examination Mr. Baird pointed out that MPAC’s suggested comparables are located nine kilometres away from the subject property and as such are too distant to be good comparables. He added that these suggested comparables are located on the opposite side of the lake, an area referred to as an “exclusive area”.

20Mr. Baird submitted Exhibit 2 consisting of a copy of the Appellant’s summations together with three suggested comparable sales with aerial photographs of the islands and MLS^® listings.

21Details of each suggested comparable property are summarized in Table 2:

Table 2

Address

Assessment ($)

Sale Date

Sale/Adjusted Sale ($)

Lot size (frontage/acres)

Subject Property

Isl 105 Stoney Lake

302,000

N/A

N/A

Front 250/ 1.20

Sale 1

Quarry Isl Stoney Lake

n/a

June 2011

273,000/ 263,790

Front 400/ 3.5 Vacant land

Sale 2

2875 Isl 72 Stoney Lake

n/a

July 2012

298,000/ 289,656

Front 375/ 1.38 Vacant land

Sale 3

936 Gilchrist Stoney Lake

n/a

2012

375,000

Front 1,985/ 2.58 Built on

22Mr. Baird testified that his property is noticeably inferior to the suggested comparables presented by MPAC. He argued that MPAC fails to recognize that the property is negatively impacted by the shape of the lot, which is surrounded by water affecting the setback by-laws making it not conducive to development; that the property is water access only; and that it has no dock. Mr. Baird argued that all of these characteristics have a negative effect on the property’s marketability. He submitted that in contrast, MPAC’s comparables are located on a very desirable area of the lake.

23To permit a direct comparison to be made between the subject property and a comparable property there must be sufficient elements of similarity, in this case with regard to the lot area and frontage of vacant land. As such the Board will disregard the Appellant’s Sale 3 because it has been improved by the construction of a three bedroom cottage.

24The best evidence before the Board is the four sales of vacant lots: Sale A and B presented by MPAC, and Sale 1 and 2 presented by the Appellant. Mr. Baird testified, and it was agreed by the assessor, that his comparable Sale 2 has a very old structure on site, but the sale was for vacant land only. The comparable properties are similar to the subject property, with time-adjusted sale values ranging from $263,790 and $461,712.

25A major factor in the value of recreational properties situated on water is their linear frontage. The subject property, with its frontage of 250 linear feet, has been assessed at a higher value than either Sale 1 or 2, which are closest in size to the subject property, but have larger frontages of 400 and 375 linear feet. For this reason, the Board finds that the best evidence of current value is the time-adjusted Sale 1, $264,000 (rounded) which is at the lowest end of the range of values before the Board. The Board finds that the correct current value of the subject property is $264,000.

Equity Analysis

26Section 44.(3)(b) requires that after determining current value the Board shall have reference to the value at which similar lands in the vicinity are assessed and reduce an assessment below a property’s current value if required to make it equitable with the assessments of similar lands in the vicinity.

27The Assessment to Sales Ratio (“ASR”) is a recognized tool used to determine if an equity adjustment is required. It is determined for this appeal by dividing the assessments as returned by the time adjusted sale prices. An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below current values. Conversely, an ASR falling above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above current values.

28Mr. Baird made no submissions regarding equity. MPAC relied on the sales of 24 properties, within 16.23 kilometres of the subject property, to determine whether properties are assessed at or close to their current values. The median ASR for the sold properties is 1.0. This result satisfies the Board that generally speaking, MPAC’s valuation methodology is achieving values similar to those determined in the marketplace and no further equitable adjustment is warranted.

CONCLUSION

29The assessment is reduced from $302,000 to $264,000 for the 2013, 2014 and 2015 taxation years.

2016 DEEMED APPEAL

30An 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.

31Section 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.