Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 5, 2016

FILE NO.: WR 137840

Assessed Person(s): Colin Treeby, Sharron Treeby

Appellant(s): Jeff Valiquette, Lori Valiquette

Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 7

Respondent(s): Township of Algonquin Highlands

Property Location(s): 1266 Rimrock Drive

Municipality(ies): Township of Algonquin Highlands

Roll Number(s): 4621-010-000-68600-0000

Appeal Number(s): 3110065

Taxation Year(s): 2015

Hearing Event No.: 607830

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

Heard: December 8, 2015 in Minden, Ontario

APPEARANCES:

Parties	Representative
Jeff Valiquette, Lori Valiquette	Andrew Williams
Colin Treeby, Sharron Treeby	No one appeared
MPAC	Mary Hennessey
Township of Algonquin Highlands	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a single family detached cottage property located at 1266 Rimrock Drive in Algonquin Highlands, Ontario.

2The subject property is a seasonal/recreational dwelling located on Kawagama Lake and is a first tier waterfront property with an effective water frontage of 225 feet and a depth of 220 feet for an effective site area of 1.14 acres.

3The building was constructed in 1969 having a total building area of 1,206 square feet.

4The assessment of the subject property for the taxation year 2015 is $445,000.

5The Appellants argue that the assessment of the subject property is too high since they purchased the property in November 2014 for the sum of $370,000 and believes that this is the best indicator of the current value of the property.

ISSUE

6The issue before the Assessment Review Board (“Board”) is to determine whether the subject property has been over assessed in relation to other properties in the neighbourhood.

DECISION

7The Board finds that the current value of the subject property for the 2015 taxation year is $422,000 (rounded).

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

9Accordingly, the assessment of the subject property for the 2015 taxation year is reduced from $445,000 to $422,000.

REASONS FOR DECISION

The Legislation

10For the 2015 taxation year, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

11Section 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.

12Section 19.(1) of the Act states:

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

13Section 19.2 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.

14Section 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.

15Section 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.

16Section 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.

Analysis

17Under 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

18The 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

19MPAC provided two suggested comparable properties as shown in Table 1.

Table 1 MPAC’s Suggested Comparable Properties

Address	Building Area (sq. ft.)	Water Frontage (ft.)	Year Built	Time Adjusted Sale Amount	Sale Date
1266 Rimrock Drive (Subject Property)	1,206	225	1969
1084 Summit Drive	1,325	140	1960	$348,509	06/2011
1003 Getaway Lane	985	100	1969	$431,079	06/2012

20The Assessor contends that the above two suggested properties in the vicinity of the subject property are comparable properties for the following reasons:

i. The properties are all located in the same neighbourhood and on the same lake;

ii. The main structure on both properties is of similar building size and age.

iii. All the properties are single family seasonal/recreational detached homes on water.

21The Assessor informed the Board that in her opinion, the property at 1084 Summit Drive is considered inferior to the subject property because its water frontage is only 140 linear feet compared to the subject property’s at 225 linear feet. She further stated that in valuing water front properties, frontage is one of the major components of value. The Assessor also informed the Board that this property is similar in building size and age to the subject property.

22The Assessor stated that the property at 1084 Summit Drive which is similar in building size and age to the subject property but has a water frontage of 140 feet which is 85 feet less than the water frontage of the subject property was sold for $348,000. In her opinion because water frontage is one of the major determinants in value, she believes that the subject property with a much larger water frontage than 1084 Summit Drive would attract a higher value than $348,000.

23The Assessor stated that the property at 1003 Getaway Lane has a main structure of 985 square feet which is 221 square feet smaller than the subject property, has a waterfrontage that is less than half the frontage of the subject property and yet it was sold in 2012 for the sum of $445,000.

24The Assessor concluded that based on her analysis of the suggested comparable property at 1003 Getaway Lane with a water frontage of 100 feet and sale price of $445,000, the value of the subject property with a water frontage of 225 feet should be valued higher than its sale price in 2014 of $370,000. She therefore concludes that the current value of $445,000 for the subject property is reasonable.

Appellants’ Evidence

25The Representative for the Appellant, Andrew Williams submitted the following information in Exhibit 3:

i. Opinion of Value prepared by the Appellants;

ii. Multiple Listing Sales (“MLS®”) Listings of various suggested comparable properties; and

iii. Photographs of suggested comparable properties.

26The Representative referred to the letter of opinion prepared by the Appellants in Exhibit 3 and presented the following arguments:

a. The subject property could not attract the value of $468,500 for which it was listed in April 2013 and was subsequently relisted in March 2014 at a price of $399,000 and was eventually bought by the Appellants in December 2014 for $370,000.

b. That the suggested comparable properties submitted by MPAC have certain features that are advantageous and add value to them and which the subject property does not have. These features include additional privacy, stone fireplace, drilled well, automobile access during winter, located on broader part of the bay and boathouse.

27In the letter of opinion prepared by the Appellants, the Representative pointed to the sales of properties at 1022 Summit Drive, 1295 Wolf Circle and 1068 Summit Drive which were sold in 2014, 2015 and 2015 respectively and which were each sold for $300,000, $355,000 and $375,000 respectively. The Representative argues that these prices are more indicative of the value at which the subject property should be assessed.

28The Representative submitted MLS Listings of the subject property, as well as that of MPAC’s comparable properties and the three properties listed above which he believes are more reflective of the sales in the area. He stated that the sale values of his three comparable properties are more reflective of sales in the area and demonstrate that the sale price of the subject property is consistent with market value of properties in the area.

Analysis of Evidence

Analysis of MPAC’s Evidence

29The Board has reviewed the property details pertaining to the two suggested comparable properties. The Board finds that the two properties located at 1084 Summit Drive and 1003 Getaway Lane are comparable to the subject property because:

a. They are all located in the same neighbourhood;

b. They are located on the same lake;

c. They are of similar building size, age and quality class; and

d. All the properties are single family seasonal/recreational detached homes.

30The two properties have sales which occurred in June 2011 and June 2012 respectively (less than one year from the valuation date of January 1, 2012) are valid sales and acceptable for consideration in determining the current value of the subject property.

31The Board considered the Assessor’s argument that water frontage plays a major part in the determination of value of seasonal/recreational properties located on water. While the Board accepts that this argument has merit, it was not provided with direct evidence in this case to demonstrate the extent to which the subject property as well as the suggested comparable properties value can be attributed to water frontage.

32The Board accepts that there exist sufficient similarities between the subject property and the two suggested comparable properties submitted by MPAC to enable them to be used in determining the current value of the subject property.

Analysis of Appellants’ Evidence

33The Board considered the claim made by the Representative that the value of the subject property is best reflected in the price of $370,000 at which it was purchased in December 2014 because in his opinion, the previous list prices of $468,500 in 2013 and $399,000 in 2014 were not attainable. The Board cannot entertain this argument principally because the sale in 2014 is too far removed from the valuation date of January 1, 2012 and therefore cannot be considered a valid sale for the purpose of this hearing.

34The Board also considered the Representative’s claim that there are certain features that are present in the comparable properties by MPAC which in his opinion make them more valuable than the subject property because such features are absent in his property. The Board dismisses these arguments because no evidence was advanced by the representative to prove that the features exist and in addition, no expert/evaluation was presented to determine the extent to which each feature added value.

35The Board reviewed the sales information pertaining to the three suggested comparable properties located at 1022 Summit Drive, 1295 Wolf Circle and 1068 Summit Drive and finds that each sale occurred at times that are too far removed from the valuation date of January 1, 2012, and therefore cannot be used in the determination of the current value of the subject property.

Determination of Current Value

36The 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 neighborhood.

37The Board finds that the two suggested comparable properties submitted by MPAC located at 1084 Summit Drive and 1003 Getaway Lane have valid sales and are sufficiently similar to the subject property and are therefore suitable for determining the current value of the subject property.

38The average sales value per square foot of the two properties is $350.34 or $350 rounded.

39When the average sales value per square foot of $350 is applied to the subject property, it results in a current value of $422,100 or $422,000 (rounded).

40The Board finds that the current value of the subject property is $422,000 (rounded).

Equity with Similar Lands in the Vicinity

41The 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 Assessment to Sales Ratio (“ASR”).

42The ASR is a ratio of a property’s assessment to its sale price. If sales are in the same homogeneous neighborhood, 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.

43The Representative for the Appellant presented no evidence on equity. MPAC presented the sales of 30 properties within 5.67 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 thirty valid sales is 1.05. A value within five percentage points is usually considered an acceptable value. In this case the median ASR of 1.05 indicates that MPAC’s methodology may be producing assessments higher than sales. In this case because the median ASR shows that properties in the vicinity are not being under assessed the Board finds that no adjustment is required for equity in accordance with s. 44(3) (b) of the Act.

CONCLUSION

44The Board finds that the current value of the subject property for the 2015 taxation year is $422,000 (rounded).

45The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

46Accordingly, the assessment of the subject property for the 2015 taxation year is reduced from $445,000 to $422,000.