Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 3, 2016 FILE NO.: WR 136087

Assessed Person(s): David Earle Baird Appellant(s): David Earle 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): 1536-020-003-00520-0000 Appeal Number(s): 2997975, 3018948, 3073624 and 3145991 (deemed 2016 appeal) Taxation Year(s): 2013, 2014, 2015 and 3145991 (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
David Earle Baird	Self-represented
MPAC	Rebecca Bolton
Township of North Kawartha	No one appeared

DECISION OF THE BOARD DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property is a seasonal, on water, one-and-a-half-storey detached house on a 1.20 acres lot that has an effective frontage of 250 feet located on Stoney Lake. The house was built in 2002. The subject property has hydro and a septic bed, and MPAC classifies its quality class at 6. It has total building area of 1,046 square feet (“sq. ft.”) and no basement. For the purposes of MPAC’s multiple regression model the lot is classified as rocky shore line on a subdivided island.

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 $459,000.

3Rebecca Bolton, appearing for MPAC, indicated that the subject property has been valued using the sales comparison approach, and submitted the sales of five properties which sold in the open market, in arm's length transactions. The time adjusted sale prices range from $561,512 to $720,090, providing a range of likely values for the subject property. 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.

4David Baird, the owner of the subject property, takes the position that the assessment is too high based on the utility and the location of the subject property, and that a more reasonable assessment of the subject property is $400,000.

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 also equitable, having reference to the assessments of similar lands in the vicinity.

DECISION

6The Board finds that the correct current value is $459,000, and that it does not require a further adjustment to make it equitable with the assessments of similar lands in the vicinity. The Board confirms the assessment of $459,000 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

14When value is a ground of appeal, the burden of proof as to the correctness of current value rests with MPAC. The Board finds that MPAC has met this burden, and finds that the current value is $459,000.

15The 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.

16Ms. Bolton, in support of the assessment as returned, presented Exhibit 1 consisting of a current value study with five comparable properties and a location map; a study of price changes over time and a time adjustment factors table; and an equity analysis.

17The assessor identified five sales of recreational properties 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 ($)	Sale Date	Sale/ Adjusted Sale ($)	Building size (sq. ft.) / Quality	Lot size Frontage/acres	Year built
Subject Property Isl 105 Stoney Lake	459,000	N/A	N/A	1,046 Q6	Front 250/ 1.20	2002
Sale A 461 Is 16 Stoney Lake	461,000	July 2012	559,000/ 561,512	1,589/ 105 Boathouse 102 Shed Q5	Front 190/ 0.91	1888
Sale B 1280 Isl 74 Stoney Lake	480,000	Nov. 2012	721,000/ 720,090	1,384/ 105 Boathouse 118 Cabin 102 Shed Q6	Front 230/ 1.10	2001
Sale C 1610 Isl 102 Stoney Lake	339,000	Aug. 2010	635,000/ 622,561	1,090/ 118 Cabin 105 Boathouse 105 Boathouse Q5	Front 210/ 1.0	1983
Sale D 2516 Isl 22 Stoney Lake	515,000	Nov. 2011	575,000/ 573,565	800/ 118 cabin/ 118 Cabin/ Q6	Front 205/ 0.98	1896
Sale E 2980 Isl Stoney Lake	583,000	May 2011	600,000/ 591,816	1,108/ 118 Cabin Q6	Front 510/ 4.88	2002

18The assessor stated that the suggested comparables are considered by MPAC to be good evidence of values of recreational properties on Stoney Lake, and accurately reflects the value of the subject property, as required by s. 19.(1) of the Act. Ms. Bolton submits that the sales require time-adjustments, providing the Board MPAC’s analysis of 490 sales in the same area as the subject property between December 2008 and December 2012. She stated that properties in this general area experienced an overall increase of approximately 17.82% in the real estate market over that period.

19Mr. 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. Details of each suggested comparable property is summarized in Table 2:

Table 2

Address	Assessment ($)	Sale Date	Sale/ Adjusted Sale ($)	Building size (sq. ft.) / Quality	Lot size	Year built
Subject Property Isl 105 Stoney Lake	459,000	N/A	N/A	1,046 Q6	Front 250/ 1.20	2002
Sale 1 464 Isl 7 Stoney Lake	411,000	Apr 2009	400,000/ n/a	1,334	Front 367/ 26,057 sq. ft.	1969
Sale 2 426 Isl 7 Stoney Lake	497,000	Jul 2011	705,000/ 697,950	1,027	Front 310/ 99.77 sq. ft.	1970
Sale 3 2279 Isl 15A Stoney Lake	n/a	Sept 2012	439,000/ n/a	Built on details not provided	n/a	n/a
Sale 4 936 Gilchrist St. Lake W.	n/a	Sept 2012	375,000/ n/a	Built on details not provided	Front 1,985/2.58 acres	n/a
Sale 5 2875 Isl 72 Stoney Lake	n/a	Aug 012	298,000/ n/a	Built on details not provided	n/a	n/a

20Mr. 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; is not conducive to a re-build or an addition; and has water access only. Mr. Baird testified that the marketability of the subject property is significantly impacted by these site conditions. He submitted that in contrast, MPAC’s suggested comparables are located on a very desirable area of the lake, and offer great conditions to potential purchasers.

21To 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 in terms of building size, amenities, and lot size. As such the Board will disregard the Appellant’s Sales 3, 4, and 5 because vital information such as building size and amenities were not submitted as evidence. Also rejected is the Appellant’s Sale 1 because the sale of the sale of the property occurred in 2009 a date too far removed from valuation date of January 1, 2012. For the purpose of this current value analysis the Board will also reject as a good comparable MPAC’s Sale C because the sale transpired in 2010, also too far removed from valuation day of January 1, 2012.

22The best evidence of current value before the Board are Sale A, B, D and E presented by MPAC, and Sale 2 presented by the Appellant. The comparable properties are similar to the subject property, and serve to provide a range of values which supports the correctness of the assessed value of the subject property.

23The time adjusted sale price for the five properties is between $561,512 and $720,090. Because the assessment as returned at $459,000 falls considerably below this range of probable sale values, it is reasonable to accept that MPAC is recognizing that the subject property is somewhat inferior to the comparables. As such the Board accepts $459,000 as being reflective of current value as required by s. 19.(1) of the Act.

24The Board is satisfied that the evidence does not lead to a conclusion that the subject property’s current value should be $400,000 as suggested by Mr. Baird.

Equity Analysis

25Section 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.

26The 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.

27Mr. Baird made no submissions regarding equity. MPAC relied on the sales of 28 sales, within 1.52 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 1.04. 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

28The assessment is confirmed at $459,000 for the 2013, 2014 and 2015 taxation years.

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.