Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 2, 2016

FILE NO.: WR 137186

Assessed Person(s): Karen Loren Daniels

Appellant(s): Karen Loren Daniels

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 13

Respondent(s): City of Oshawa

Property Location(s): 133 Blackwell Crescent

Municipality(ies): City of Oshawa

Roll Number(s): 1813-070-004-24896-0000

Appeal Number(s): 3097527

Taxation Year(s): 2015

Hearing Event No.: 600044

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

Heard: October 30, 2015 in Oshawa, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
Karen Loren Daniels	Jack Bunker
MPAC	Simon Thow, Amanda Morgan
City of Oshawa	Craig McCullagh

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a single family detached residential property located at 133 Blackwell Crescent in Oshawa, Ontario.

2The subject property is situated on a lot with a frontage of 36.09 feet and a depth of 95.14 feet for an effective site area of 3,433.69 square feet.

3The building was constructed in 2013 in a neighbourhood consisting of homes built between 2004 to the present.

4The total building area is 2,352 square feet.

5The subject property has a basement area of 995 square feet.

6The assessment of the subject property for the taxation year 2015 is $363,000.

7The Representative for the Appellant (the “Representative”) argues that the assessment of the subject property is too high resulting in excessive taxes on properties in the neighbourhood. He stated that the easements for Bell Canada, Rogers Communications, Hydro One etc. as well as the lack of certain municipal services such as fire hall, schools and incomplete road construction have a negative impact on the value of the property which MPAC has overlooked in setting its assessment.

ISSUE

8The 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

9The Board finds that the current value of the subject property for the 2015 taxation year is $367,000 (rounded).

10The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

11The current value established is higher than the assessment determined by MPAC. No party has given notice of a request for an increase in the assessment. The Board confirms the assessment of the subject property in the amount of $363,000 for the 2015 taxation year.

REASONS FOR DECISION

The Legislation

12For 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 Assessment Act (“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 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.

17Section 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.

18Section 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

19Under 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.

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

Current Value

20The 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

21MPAC provided five suggested comparable properties as shown in Table 1:

Table 1 MPAC’s Suggested Comparable Properties

Address	Bldg. Area (sq. ft.)	Lot Size (sq. ft.)	Year Built	Time Adjusted Sale Amt.	Sale Date
133 Blackwell Crescent (Subject Property)	2,352	3,433.69	2013
2238 Minsky Place	2,361	7,887.00	2005	$377,228	03/2012
2172 Minsky Place	2,074	5,181.00	2005	$364,464	01/2012
49 Woodbine Place	2,535	3,808.00	2006	$383,444	09/2011
2383 Pilgrim Square	2,535	3,808.40	2010	$397,924	10/2011
2424 Winlord Place	2,198	3,611.41	2005	$352,317	12/2011

22The Assessor contends that the above five 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.

ii. The properties are of similar building size, lot size and age.

iii. All the properties are single family detached homes.

iv. All properties in the neighbourhood were constructed between 2004 and the present time.

23The Assessor informed the Board that the subject property is located in a new development which continues to be developed and that the municipal services are not yet fully completed.

24The Assessor stated that of the five suggested comparable properties submitted, the property located at 2383 Pilgrim Square is considered to be the most comparable to the subject property. This property was sold within two months of the January 1, 2012 valuation date; it has a similar building and lot size, it is located within the same neighbourhood, has the same level of amenities and services. This property sold for an adjusted sale price of $397,924.

25The Assessor pointed out that when the difference in age between the most comparable property at 2383 Pilgrim Square and the subject property is taken into account, the estimated market value of the subject property becomes $375,000. On the basis of this analysis, the Assessor states that in his opinion, the current value of the subject property at $363,000 is reasonable.

Appellant’s Evidence

26The Representative for the Appellant, Mr. Bunker submitted the following information in Exhibit 3:

i. Sale and tax information regarding three properties in Oshawa.

ii. Hypothetical case to explain his concern with the timing of the phased-in application of the assessment and taxes.

iii. Table outlining a breakdown of development charges applicable to the new properties in the development.

iv. List of issues that should be considered as having a negative impact on value.

v. Photographs to highlight some of the issues outlined.

27The Representative argues that the Appellant’s 2015 tax obligation at $5,589.97 per year is higher than that of other properties with comparable building square footage and lot size.

28The Representative submitted the following information pertaining to four properties in the Oshawa area to support his argument above:

Address	Lot Size (ft.)	Bldg. Size (sq. ft.)	Sale Price	2015 Taxes
133 Blackwell (Subject Property)	97.00 x 36.00	2,100		$5,589.97
1444 Arborwood Drive	85.00 x 33.00	2,900	$445,900	$4,546.00
825 Corbetts Road	108.00 x 49.00	2,900	$495,000	$5,300.00
19 Woolacott Lane	111.00 x 42.00	2,067	$474,900	$4,100.00
579 Shaftsbury Road	89.73 x 39.39	2,190	$459,000	$4,685.00

29The Representative informed the Board that all of the above properties have full municipal services which are absent in the subject property’s neighbourhood. He believes that it is unfair for the Appellant to be charged with the full tax obligation when the full range of services is lacking and not available.

30The Representative argues that the new development fee, which he estimates at $44,740 and shown in his Exhibit, is disproportional to the services being provided and that the phased-in amounts should be linked to the time the services are actually in place. The Representative further argues that the subject property should be valued at its base price of $378,389 (sale amount) minus the $44,740 tax for new development services.

31The Representative claims that the date at which property values are established by MPAC is arbitrary and should be instead established on the date of occupancy of the property.

32The Representative cited various issues which he believes have a negative impact on the value of the Appellant’s property; these include issues mainly regarding the lack of or incomplete municipal services such as the absence of a fire hall, and schools and unfinished road construction. The Representative also cited other concerns which he believes affect the value of this property and these are mainly related to what he terms “urban decay” and are shown in the various photographs in his exhibit.

33The Representative further claims that the new development tax of $44,740 should be phased-in over the period 2015 to 2018 as follows:

Year	Phased-in value
2015	$11,200
2016	$11,100
2017	$11,300
2018	$11,100
Total Phased-in amount	$44,700

Analysis of Evidence

Analysis of MPAC’s Evidence

34The Board has reviewed the property details pertaining to the five suggested comparable properties. The Board finds that the three properties located at 49 Woodbine Place, 2383 Pilgrim Square and 2424 Winlord Place are comparable to the subject property because:

a. They are all located in the same neighbourhood.

b. They are also similar building size, lot size and age.

c. All the properties are single family detached homes.

35The three properties have valid sales and are acceptable for consideration in determining the current value of the subject property.

36The Board rejects the properties located at 2238 and 2172 Minsky Place as being comparable to the subject property because they both have lot sizes that are considerably larger than the subject property.

37The Assessor pointed out and the Board concurs that it is not unusual for new developments such as the subject’s development to have municipal services built in concert with the rate of development and that it should be expected that the various municipal services such as schools, roads, fire hall etc. would be completed as the development proceeds. This explanation was supported by the representative for the City of Oshawa regarding the new development in which the subject property is located.

Analysis of Appellant’s Evidence

38The Board considered the claim made by the Representative that the tax on the subject property is disproportional to that being paid by other property owners in Oshawa who have the full spectrum of municipal services available to them. The Board recognizes that the Appellant may not currently have all the municipal services available in the neighbourhood. The Board does not have any evidence that such services would be permanently withheld. In any event, the Board is unable to make a ruling on this issue since the responsibility for the provision of municipal services is outside the jurisdiction of the Board.

39The Board also considered the Representative’s claim that the new development tax should only be applicable to the subject property from the date of occupancy in 2014 and not tied to the valuation date of January 1, 2012. The Board is unable to entertain the pleading of the Appellant in this regard simply because the date at which properties are to be valued is established by statute as per s. 19.2(1)2 of the Act.

40The Board reviewed the list of various issues brought to its attention by the Representative, which he claims all have a negative impact on the value of the property. The Board is unable to evaluate these concerns because no professional/expert evaluation/opinion was presented to determine if and to what extent the various issues identified may have on value. The Board has therefore given no consideration to the Representative’s claim in this regard.

41The Board notes that the Representative provided the tax obligations associated with four properties which he claims have the full spectrum of municipal services. However, the Board places no weight on these properties since information necessary to establish comparability with the subject property was lacking. In addition, the Board could not determine the authenticity of the limited details provided and therefore gives no consideration to this aspect of the Representative’s claim.

Determination of Current Value

42The 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.

43The Board finds that the three suggested comparable properties submitted by MPAC located at 49 Woodbine Place, 2383 Pilgrim Square and 2424 Winlord Place have valid sales and are sufficiently similar to the subject property and are therefore suitable for determining the current value of the subject property.

44The average sales value per square foot of the three properties is $156.15 ($156) rounded.

45When the average sales value per square foot of $156 is applied to the subject property, it results in a current value of $366,912.

46The Board finds that the current value of the subject property is $367,000 (rounded).

Equity with Similar Lands in the Vicinity

47The 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”).

48The 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.

49The Representative for the Appellant presented no evidence on equity. MPAC presented the sales of 30 properties within 0.45 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 average 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

50The Board finds that the current value of the subject property for the 2015 taxation year is $367,000 (rounded).

51The Board finds no adjustment is required for equity purposes under s. 44.(3)(b) of the Act.

52The current value established is higher than the assessment determined by MPAC. No party has given notice of a request for an increase in the assessment. The Board confirms the assessment of the subject property in the amount of $363,000 for the 2015 taxation year.