Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 12, 2016 FILE NO.: WR 141692

Assessed Person(s): B. L. S. Appellant(s): B. L. S. Respondent(s): City of Hamilton Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 19

Property Location(s): Withheld Municipality(ies): City of Hamilton Roll Number(s): Withheld Appeal Number(s): 3142861 Taxation Year(s): 2015 Hearing Event No.: 630671

Legislative Authority: Section 357.(1)(d.1) of the Municipal Act, 2001, S.O, 2001, c. 25, as amended

Heard: July 12, 2016 in Dundas, Ontario

APPEARANCES:

Parties	Representative
B. L. S.	Self-represented
City of Hamilton	Val Mitchell

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The Applicant, (B. L. S.) filed an application with the City of Hamilton (“City”) seeking a cancellation, refund or reduction of property taxes for the taxation year 2015.

2B. L. S. stated that she advised the City that she is unable to meet her tax obligations because of her sickness which renders her incapable of employment.

3B. L. S. is seeking a reduction, cancellation or refund of taxes under s. 357.(1)(d.1) of the Municipal Act, 2001, because of her inability to pay the taxes due to sickness.

ISSUE

4The issue before the Assessment Review Board (“Board”) is to determine whether the Applicant’s property taxes for the taxation year 2015 should be cancelled, reduced or refunded because of the Applicant’s inability to pay due to sickness.

DECISION

5The Board finds that based on the evidence before it, the Applicant has demonstrated to the satisfaction of the Board that there exists an inability to meet her property tax obligations for taxation year 2015 as set out in s. 357.(1)(d.1) of the Municipal Act, 2001, because the Applicant is legally blind and recovering from a kidney transplant procedure and her sickness, as confirmed by her medical practitioner’s report, renders her unable to work and her finances are severely limited.

6The Board accordingly grants a cancellation of the property taxes for 2015 in the amount of $3,385.77 on the property located at (address withheld).

BACKGROUND

7The Municipal Act, 2001, s. 357.(1)(d.1) states that:

357.(1) Upon application to the treasurer of a local municipality made in accordance with this section, the local Municipality may cancel, reduce or refund all or part of the taxes levied on land in the year in respect of which the application is made if,

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

8In order to satisfy the conditions set out above, a two part test is applied. The first part of the test is for the Board to determine if sickness or extreme poverty exists. If neither condition is met, then the application fails. The second part of the test is that if either condition is present, the applicant must demonstrate to the satisfaction of the Board an inability to pay some or all of the taxes.

Applicant’s Evidence

9The Applicant presented as Exhibit 1, a copy of a letter from her medical practitioner which states that the Applicant has been diagnosed as being legally blind since 1995. The medical practitioner’s letter also states that in his opinion, the Applicant will not be able to resume any type of work. The letter from the medical practitioner was not dated.

10The Applicant informed the Board that her only asset is the property she owns at (address withheld). The Applicant indicated that she owned no other assets, physical or financial.

11The Applicant advised the Board that she has a mortgage against the property in the amount of $63,221.28. She presented evidence to support her claim and stated that the principal and interest payments amounted to $3,524.40 for the year 2015.

12The Applicant provided the Board with a copy of a “Statement of Account” dated July 5, 2016 from the City showing arrears of taxes pertaining to the subject property. The statement confirms that for the taxation year 2015 the total amount of taxes levied was $3,385.77. The Applicant advised the Board that she has signed a Deferred Tax payment plan with the City which sets aside a portion of the taxes each year which would be repaid at some future date. The statement provided by the City confirms that the outstanding Deferred Taxes as of September 2008 stood at $10,869.23.

13The Applicant presented evidence to outline her monthly income and expenses as follows:

Income: Pension/Social Assistance/CPP $1,490.19

Expenses: i. Mortgage $ 320.00 ii. Home Insurance $ 84.65 iii. Food $ 300.00 iv. Medication $ 40.00 v. Life Insurance $ 31.36 vi. Telephone $ 46.26 vii. Cable/Internet $ 136.62 viii. Hydro/Water $ 106.15 ix. Fuel(Furnace) $ 145.66 x. Water Heater Rental $ 14.97 xi. Loan Payment $ 100.00 xii. Property Taxes $ 150.00 Total $ 1,475.67

14The Applicant provided the Board with a copy of a Notice of Assessment from Canada Revenue Agency that outlines her sources of income for the taxation year 2015 as well as the quantum of such income. The Notice confirms that her total annual income for the taxation year 2015 was $17,880.

15The Applicant provided the Board with documents to verify her various categories of expenses and the various individual amounts that are incurred on a monthly basis which amount to $1,475.67 per month.

Board’s Analysis

16The test under s. 357.(1)(d.1) of the Municipal Act, 2001, refers to whether the applicant is unable to pay property taxes due to sickness or extreme poverty.

17The Board has reviewed the medical report submitted by the Applicant with regard to her sickness. The medical report confirms that the Applicant has been medically blind since 1995 and her physical presence at the hearing with the help of her grand-daughter fully supports the medical report. Although the medical report was not dated, the City agreed to accept the validity of the medical report for 2015. The Board accepts the medical report as valid.

18The Applicant also indicated to the Board that in the past she had been undergoing dialysis but has since received a kidney transplant and continues to have many adverse experiences. The Applicant states that this condition also further impacts negatively any chance of her being able to enter the workforce.

19The Board considered the evidence presented regarding the Applicant’s income and expenses. The Board accepts the income as stated since this was corroborated by the Notice of Assessment from Canada Revenue Agency for the taxation year 2015.

20The evidence pertaining to monthly expenses was reviewed by the Board. The Applicant provided satisfactory information pertaining to the various categories of expenditures and the amounts expended against each category. The Board and the City found that the expenses were reasonable and verifiable.

21The Board and the City noted that there were other areas of expenses that were not recorded in the monthly expenses of the Applicant (such as clothing and household expenses including maintenance) which are reasonable expenses that the Applicant would incur in the normal course of everyday life. The Board notes that the Applicant has been very co-operative and forthcoming with her income and expenses and did not appear to overstate any information and preferred not to include smaller expenditures incurred. The Board notes that these various omitted expenses further exacerbate the Applicant’s financial situation.

22The Board notes that the Applicant has accepted the Tax Deferral scheme with the City to help her cope with her financial situation. The Representative for the City explained that the impact of the Tax Deferral is that the Applicant is deferring the annual increases in taxes since entering the program. In other words, her annual current property taxes remain the same while the annual increases are set aside in the Deferred Account. The outstanding balance on the Deferred Account stands at $10,869.23 as of September 2008. The Deferred Account is a contingent liability which continues to grow by the amount of the annual increase in taxes.

23The Board notes that the monthly expenses listed by the Applicant do not leave room to make full payment of property taxes and that this condition is further aggravated if the other legitimate expenses that have been omitted were to be added to the monthly expense amount established in evidence.

24In the Board’s view, the threshold for individuals who claim an inability to pay their property taxes because of sickness is not simply that the individuals are unable to make ends meet in the year under appeal but must demonstrate that they have made every effort to meet their tax obligations.

25The Board finds that given her circumstance, the Applicant has very limited opportunities to improve her financial condition but appears to be making every effort to try to meet her financial obligations.

26The Board notes that the only expense incurred by the Applicant that can be considered as non-essential is the expense associated with the provision of internet/cable facilities. However, as explained by the Applicant, she is essentially homebound and these services provide the only means of (business) communication and information outside the home. The Board accepts this explanation as reasonable.

27The Applicant explained that her high food expense is primarily due to the fact that she recently had a kidney transplant which requires her to have special dietary needs. The Board accepts this expense as reasonable.

CONCLUSION

28In viewing an application under the Municipal Act, 2001, the Board does not only look at the income and expenses of the applicant but also looks at the full spectrum of the applicant’s financial resources available to him/her and determine whether there was any opportunity that would allow him/her to mitigate their tax obligation as well as to consider whether the Applicant has taken deliberate steps to this direction.

29The Board finds that based on the evidence before it, the Applicant has demonstrated to the satisfaction of the Board that there exists an inability to meet her property tax obligations for 2015 as set out in s. 357.(1)(d.1) of the Municipal Act, 2001, because the Applicant is legally blind and recovering from a kidney transplant procedure and her sickness confirmed by her medical practitioner’s report renders her unable to work and her finances are severely limited.

30The Board accordingly grants a cancellation of the property taxes for 2015 in the amount of $3,385.77 on the property located at (address withheld).