Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 28, 2016

FILE NO.: WR 142242

Assessed Person(s): Christopher Nicol

Appellant(s): Christopher Nicol

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): Town of Caledon

Property Location(s): 23 King Street West

Municipality(ies): Town of Caledon

Roll Number(s): 2124-100-008-07400-0000

Appeal Number(s): 3058735 and 3154766

Taxation Year(s): 2015 and 2016

Hearing Event No.: 625568

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

Heard: August 25, 2016 In Caledon, Ontario

APPEARANCES:

Parties	Representative
Christopher Nicol	Self-represented
MPAC	Matt Irwin
Town of Caledon	No one appeared

DECISION OF THE BOARD DELIVERED BY SONIA LIGHT

ISSUE

1The subject property municipally known as 23 King Street West, in the Town of Caledon, is improved with a detached two storey residential structure that has been converted into a commercial building of 2,397 square feet with 1,350 square feet on the first floor and 1,047 square feet on the second floor. The lot on which it is situated contains 5,662.8 square feet.

2MPAC returned the assessment for the 2015 and 2016 taxation years at $505,000. Following an inspection of the property on July 8, 2016 to verify the building measurements and assembly components of the building, MPAC updated the assessed value to $515,000. However, at the hearing MPAC is recommending that the returned assessments for the respective taxation years be confirmed at $505,000 for both years.

3The Appellant argued that the assessment as returned is too high. He argues that the comparable sale most relied on by MPAC to support its returned and updated assessment is superior to the subject property in terms of both its size and location. He also argued that the subject property should be assessed closer to $400,000 in keeping with the assessment of the neighbouring property at 33 King Street West that he states is about double the size of the subject property and assessed at only $379,000.

4The Assessment Review Board (“Board”) must determine whether the 2015 and 2016 assessments are correct and equitable.

DECISION

5For the reasons stated below and as directed by s. 44.(3)(a) of the Assessment Act (“Act”) the Board finds that the current value of the subject property is $515,000.

6The Board finds that the current value should not be adjusted for equity pursuant to s. 44.(3)(b) of the Act.

7Accordingly, the assessment of the subject property for the 2015 and 2016 taxation years is confirmed at $505,000 because MPAC is not seeking an increase to the returned value.

REASONS FOR DECISION

Legislation

8Section 19.(1) of the Act states:

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

9Section 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.

10Section 19.2(1)3 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.

11Section 44.(3) 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.

12Section 40.(26) of the Act directs:

40.(26) Deemed appeals, 2009 and subsequent years. – 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.

Current Value Analysis

13Matt Irwin is a Property Valuation Specialist with MPAC. He prepared a valuation report which he submitted as Exhibit 1 at the hearing. Mr. Irwin believes that the best indicator of value of the subject property should be determined using the cost approach to value, although he performed a sales analysis in an attempt to support the value he obtained based on the cost approach to value.

14Mr. Irwin inspected the subject property on July 8, 2016 to verify the measurements and the assembly components of the building in the automated cost system (“ACS”) relied on by MPAC in determining the returned value. Based on his inspection he made minor adjustments to the ACS data respecting the value of the building on the subject property resulting in a revised value of $515,000 for the land and building, rather than the original value of $505,000 as returned. However, as mentioned above, MPAC is not seeking an increase to the returned value.

15Mr. Irwin’s comparable sales analysis appears in Appendix C of his valuation report. The median and average sale price per square foot of the land of his suggested comparable sales is $99 which is substantially higher than the $76 per square foot attributed to the land of the subject property by MPAC’s ACS system. However, the Board does not find the comparable sales analysis to be of much assistance because the data provided to the Board respecting the suggested comparable sales is insufficient for the Board to draw any meaningful conclusions from it. The Board also agrees with Mr. Nicol that the land values from the sales of properties on the main street of Queen Street may not sufficiently resemble the value of land of the subject property located, in an arguably less valuable location. Therefore, the Board finds the best evidence available to the Board respecting the price per square foot of the land of the subject property to be $76 as presented in MPAC’s ACS system.

16Accordingly the Board finds that the current value of the subject property was properly valued at $515,000 based on the cost approach to value and that the returned value of $505,000 for the 2015 and 2016 taxation years should be confirmed because MPAC is not seeking an increase to the returned value.

Equity Analysis

17Mr. Nicol testified that the neighbouring property at 33 King Street West, also a residential dwelling converted to a commercial use, had been assessed at a value of $379,000. The floor area of the building on that property is 4,309 square feet and the lot size is almost 11,000 square feet, practically double the size of the subject property. Therefore, he argued that the assessment of the subject property at $505,000 was inequitable having regard to the assessment of this property and therefore the assessment of the subject property should be reduced accordingly. However, the assessed value of 33 King Street West appears to be an anomaly as Mr. Nicol presented no other properties to demonstrate that properties in the vicinity similar to the subject property are being assessed significantly lower than the subject property.

18Mr. Irwin presented as Equity Study at Appendix D of his valuation report that included the sales of 12 similar properties in the vicinity. The Board has reviewed the data presented in his study and could not discern a trend that similar commercial properties were assessed at values below their sale prices.

19Accordingly, the Board finds that the current value should not be adjusted for equity pursuant to s. 44.(3)(b) of the Act.