Lars Dahl and Agneta Dahl v. Municipal Property Assessment Corporation, 2016 CanLII 37481

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 15, 2016

FILE NO.: WR 137838

Assessed Person(s): Lars Gunnar Ingemar Dahl and Agneta Eva Dahl

Appellant(s): Lars Dahl and Agneta Dahl

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16

Respondent(s): Town of Bradford West Gwillimbury

Property Location(s): 3710 Line 12

Municipality(ies): Town of Bradford West Gwillimbury

Roll Number(s): 4312-020-002-10102-0000

Appeal Number(s): 3041611, 3087699 and 3155199 (deemed 2016 appeal)

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

Hearing Event No. 603558

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

Heard: November 24, 2015 in Bradford, Ontario

APPEARANCES:

Parties	Representative
Lars Dahl	Self-represented
MPAC	P. Thompson
Town of Bradford West Gwillimbury	No one appeared

DECISION DELIVERED BY CRISTINA MARQUES

ISSUE

1The subject property has a lot area of 47.83 acres, and is improved with a two-storey dwelling with a detached garage that was built in 1910. The total building area is 1,126 square feet (“sq. ft.”) with 485 sq. ft. of unfinished basement. In addition it has a 3,827 sq. ft. barn. The subject property was assessed by the direct sales comparison approach at $599,000 for the 2014 and at $605,000 for the 2015 taxation years.

2Patricia Thompson, appearing for MPAC, states that the subject property has been assessed based on the evidence of sales of similar properties in the vicinity of the subject property. In evidence she provided the details of the sales of five suggested comparable properties. She recommended reducing the assessment to $562,000, for both taxation years, based on a data correction that occurred during the Request for Reconsideration review of the property in 2014.

3Lars Dahl, the appellant, takes the position that assessments as recommended are still too high, and that a more reasonable assessment for the subject property is $321,000, based on an appraisal done for the subject property.

4The Assessment Review Board (“Board”) must determine current value for the 2014 and 2015 taxation years, and must also determine whether these values are equitable, having reference to the assessments of similar lands in the vicinity.

Decision

5The Board finds that the current value of the property is as of January 1, 2012 is $562,000, and that this value is equitable with the assessments of similar lands in the vicinity.

6The Board reduces the assessment of the subject property from $599,000 to $562,000 for the 2014 taxation year; from $605,000 to $562,000 for the 2015 taxation year and for the deemed 2016 taxation year.

REASONS FOR DECISION

7The Board must have regard to s. 1, 19.(1), 19.2(1), 40.(17), 40.(19), 44.(3)(a) and (b), and 45 of the Assessment Act (“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 provides:

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.

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.

13Sections 44.(3)(a) and (b) of the Act state:

44.(3) Reference to similar lands in vicinity 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.

14Section 45 of the Act states:

45. Powers and functions of the Assessment Review Board. – Upon an appeal with respect to an assessment, the Assessment Review Board may review the assessment and, for the purposes of the review, has all the powers and functions of the assessment corporation in making an assessment, determination or decision under this Act, and any assessment, determination or decision made on review by the Assessment Review Board shall be deemed to be an assessment, determination or decision of the assessment corporation and has the same force and effect.

Board’s Analysis

Current Value

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.

16Ms. Thompson submitted Exhibit 1 consisting of an MPAC report which included a property profile, a current value study with five comparable sales, a time adjustment factors table, sales for price changes over time schedule, and an equity analysis study.

17She submitted that the time adjusted sale prices of the five comparables provide an indication of likely values for the subject property. Details of each property on Current Value Study are summarized in Table 1:

Table 1

Address	Assessment	Sale Date	Sale/Time Adjusted Sale ($)	Building Size (sq. ft.)	Lot Size (acres)	Year Built
Subject Property 3710 Line 12	Recommendation 562,000	N/A	N/A	1,126	47.83	1910
Sale A 4119 Line 8	N/A	Dec. -2011	385,000/388,684	986	6.84	1975
Sale B 4279 Line 8	431,000	Jul. -2012	625,000/592,256	1,053	1.0	1998
Sale C 3592 Line 12	N/A	Oct. – 2011	500,000/511,457	Vacant land sale	48.99	N/A
Sale D 1987 10th side road	N/A	Nov. – 2011	480,000/486,440	1,245	24.77	1965
Sale E 5338 Highway 9	N/A	Feb. 2011	295,000/332,722	Vacant land sale	10.04	N/ A

18In order to find comparable sales, the assessor had to move outside of the subject’s property’s vicinity T42. The suggested comparables are in the vicinities F93, and W10, which are in the same “economic area” as the subject property, and have similar marketability. Ms. Thompson gave details on MPAC’s analysis of sales that occurred between January 2011 and December 2012, and stated that the area experienced an overall increase of 26.52% in the real estate market. Time Adjustment Factors (“TAF”) for each month during the study period were provided together with the data for the 240 sales analyzed.

19Ms. Thompson stated that suggested comparables are considered by MPAC to be good evidence of values of properties in the area. She relied on the five sales to determine whether properties are assessed at or close to their current values, and indicated that the direct sale comparison approach accurately reflects the value of the property, as required by s. 19.(1) of the Act. She testified that the time adjusted sale prices of the two comparables provide a range of likely values for the subject property between $332,000 and $592,000. As the recommended assessment for the subject property at $562,000 is in this range, as such she urged the Board to accept the recommendation.

20Mr. Dahl filed Exhibit 2 consisting of an appraisal report for the subject property, which values the subject property with the structures and with 10 acres of land (out of the total 47.83 acres) at $321,000. Mr. Dahl is of the opinion that the four comparables provide a good indication of the subject property’s value. Details of each property on the appraisal report are summarized in Table 2:

Table 2

Address	Assessment	Sale Date	Sale ($)	Building Size (sq. ft.)	Lot Size (acres)	Year Built
Subject Property 3710 Line 12	Recommendation 562,000	N/A	N/A	1,126	47.83	1910
Sale 1 2843 Highway 27	N/A	Apr. -2013	240,000/	2,009	0.60	n/a
Sale 2 3712 Highway 27	431,000	Feb. -2012	275,000	1,457	4.46	n/a
Sale 3 4330 County Road 88	N/A	May. -2013	312,000	2,476	0.50	n/a
Sale 4 5329 15th Line	N/A	Jun. – 2012	480,100	1,994	10.26	n/a

21Mr. Dahl indicated that the subject property is developable land, and that MPAC fails to recognize the decreased value of the subject property due to a Bell Canada right of way, and due to some environmentally protected parts of the lot, which comprises the remaining acreage. He submits that the best indication of current value is the appraisal of the subject property, and he urged the Board to reduce the assessment of the subject property accordingly to $321,000.

22The Board received no evidence to support the existence of environmentally protected lands within the envelope of the subject lands. There is also no evidence before the Board that suggests that the Bell Canada’s right of way diminishes the marketability of the subject property.

23As for Mr. Dahl’s suggested comparables, as per appraisal report Exhibit 2, the assessor testified that two out of the three sales in the appraisal report are estate sales. The Board places little weight on the appraisal report because the author of the report was not present for MPAC and the Board to cross-examine.

24The Board notes that it makes sense that the assessment of the subject property would be somewhat higher than properties with smaller lots in order to account for the value attributable for the extra land. For these reasons the Board rejects the appellant’s suggested comparable properties.

25The Board rejects as good comparables MPAC’s sale A, B and D because they are much newer houses built in 1975, 1998, and 1965, and because they have considerably smaller lots at 6.84,1 and 24.77 acres. Also rejected is Sale E because it is a 10 acre vacant lot.

26The best evidence of current value before the Board is MPAC’s sale C. The vacant lot property sold in October 2011 for an adjusted sale price of $511,457. The recommended current value assessment of the subject property at $562,000 is higher than the sale value of the Board is accepted comparable. But it makes sense to the Board that the assessment of the subject property would be higher than an unimproved property with similar lot size, 48.99 acres, in order to account for the value attributable for the dwelling and barn.

27The Board finds that the current value of the subject property is $562,000.

Equity Analysis

28Section 44.(3)(b) mandates and directs that after determining current value, the Board shall have reference to the value at which similar lands in the vicinity are assessed. The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if similar properties in the vicinity are assessed below their current values. The ASR is determined by dividing the assessment as returned with 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.

29Mr. Dahl presented no equity evidence.

30To determine whether properties are assessed at or close to their current values MPAC relies on the sales of 30 properties, within 5.38 kilometres of the subject property, as listed in the equity analysis of Exhibit 1. The median ASR for the sold properties is 0.96, which is within MPAC’s acceptable range of ASRs between 0.95-1.05. 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

31The current value of the property for the 2014 and 2015 taxation years is $562,000. There is no evidence to support a reduction in the assessment below current value. The assessment is reduced, as per MPAC’s recommendation, from $599,000 to $562,000 for the 2014 taxation year, and from $605,000 to $562,000 for the 2015 taxation year.

2016 DEEMED APPEAL

32An 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.

33Section 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.