Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

November 23, 2016

FILE NO.:

WR 142244

Assessed Person(s):

Greg Graham and Suzanne Graham

Appellant(s):

Greg Graham and Suzanne Graham

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”) Region 02

Respondent(s):

Township of Athens

Property Location(s):

168 Big Waters Lane

Municipality(ies):

Township of Athens

Roll Number(s):

0819-819-029-10000-0000

Appeal Number(s):

3098229, 3098230, 3098232, 3098231 and 3143681

Taxation Year(s):

2014, 2015 and 2016

Hearing Event No.:

634468

Legislative Authority:

Sections 32, 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard:

July 15, 2016 in Athens, Ontario

APPEARANCES:

Parties

Representative

Greg Graham and Suzanne Graham

Greg Graham

MPAC

Walter Fleming

Township of Athens

No one appeared

DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT

INTRODUCTION

1This appeal came before the Assessment Review Board (“Board”) initially to address s. 32, 34 and 40 of the Assessment Act (“Act”), for taxation years 2014, 2015 and 2016. The Appellant withdrew his appeals concerning s. 34 and 40 for the 2014 taxation year. The Appellant is appealing the 2015 taxation year assessment as being too high.

2The subject property is improved with a 1,948 square foot (“sq. ft.”) detached two storey seasonal/recreational dwelling built in 2013, including a boat house circa 1962, detached garage circa 1976 and a 600 sq. ft. cabin built in 2013, located on water, specifically Charleston Lake. The property has an effective frontage and depth of 120 sq. ft. and 438.72 sq. ft. respectively, with a site area of 1.2 acres. The quality classification given by MPAC is a 6.5. The property is assessed at $521,000 for 2015 and the deemed 2016 taxation years.

3Walter Fleming, appearing on behalf of MPAC, stated that the subject property has been assessed based on the evidence of the sales of similar properties in the vicinity of the subject property. In evidence Mr. Fleming provided the sales of five suggested comparable properties.

4Greg Graham appeared as a self-represented Appellant.

5Mr. Graham argued that over the past few years after his house was built, he noticed continued upward adjustments in his property assessment. He stated that while he understood the adjustments made for the various improvements, taking the property to $485,000, he could not accept the latest assessment of $521,000 for the 2015 taxation year and filed an appeal with the Board.

6Mr. Graham provided as evidence, see Exhibit 2, a compilation of seven properties for sale within the vicinity of the subject property, to support his argument that his property is over assessed. During Mr. Graham’s presentation of his comparables, the Board informed him that the seven properties have not been sold yet and therefore cannot be considered by the Board in making a determination concerning his property. The Board explained that it cannot speculate as to the outcome of a potential sale in advance, and could only entertain properties that have actually sold, as reflected in s. 19.(1) of the Act, specifically, “… would realize if sold…”

7Mr. Graham ended his presentation early, upon realizing his exhibits were not useful to the Board.

8The Board must determine the correct current value of the subject property and whether the assessment of the subject property so determined is equitable with the assessments of similar properties in the vicinity of the subject property.

DECISION

9For the reasons stated below and as directed by s. 44.(3)(a) of the Act the Board finds that the current value of the subject property, as at the valuation day January 1, 2012, is $540,000. However, as MPAC is not recommending this value, but a lower assessed value of $521,000 and there is no objection by the Appellant, the Board finds the proposed value of $521,000 as reasonable and representative of the 2015 current value for the subject property.

10The Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property, as determined above, requires a further adjustment in accordance with s. 44.(3)(b) of the Act.

11Accordingly the assessment of the subject property as at the valuation day, January 1, 2012, is confirmed at $521,000. The appeals are resolved as follows:

Year

Appeal Number

Section

Decision

2014

3098229

40

Withdrawn

2014

3098230

34

Withdrawn

2015

3098232

32

Confirmed at value $521,000

2015

3098231

40

Changed from $485,000 to $521,000

2016

3143681

40

Confirmed at value $521,000

REASONS FOR DECISION

Current Value Analysis

12The initial task for the Board is to determine the current value of the subject property as required by s. 44.(3)(a) of the Act “…the Board shall…determine the current value of the land…”

13Section 19.(1) of the Act states that “…the assessment of land shall be based on its current value…” and s. 1 of the Act defines current value as “…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…”

14The best test of current value is an arm’s length and market tested sale of the subject property on the valuation day, January 1, 2012 or close to it. If, as in this case no such transaction took place, the next best measure of current value is arm’s length and market tested sales of comparable properties in the same vicinity and market, on or close to the valuation day. This measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

15To enable an estimate of value for the subject property to be derived from a comparable property, there must be sufficient elements of similarity, in terms of physical factors such as total building area, land area, land frontage, age of construction, physical condition etc.; and in terms of neighbourhood characteristics such as access to amenities, type and nature of housing etc., so as to enable a direct comparison to be made between the comparable property and the subject property.

16Furthermore, to be indicative of both the market and values on the valuation day, a sale of a suggested comparable property should occur close to the valuation day. Generally, the Board prefers the sale of properties that occur within six months on either side of the valuation day. When such evidence is either limited or not available, the Board has accepted sales of properties up to 18 months on either side of the valuation day, or in exceptional circumstances, greater time periods.

17Mr. Fleming of MPAC provided the Board with five sales of suggested comparable properties which he argues are the most similar properties to the subject property in the vicinity of the subject property.

18Mr. Graham provided seven suggested comparable properties that had yet to sell. The Board is unable to consider this evidence by Mr. Graham in its determination of current value, as the Board cannot speculate as to the final sale prices of these properties. The Board’s best evidence therefore relies on the comparables provided by MPAC.

19The Board places no weight on the Properties B and D as they are inferior due to location, situated on significantly smaller lakes than the subject property, are single storey structures having dissimilar lot and building areas. Similarly, Property A, although on the same lake as the subject property, is also an unsuitable comparable, being smaller and of a lower quality designation.

20The Board finds Property E to be the best comparable to the subject property. Located on a similarly large scale lake, it has the same quality designation as the subject property, a two storey house, a similar lot frontage and overall physical condition. Although older than the subject property, the Board finds this property has attributes of sufficient similarity to enable a reasonable determination of current value for the subject property.

21The Board finds that the best evidence of the current value of the subject property is Sale E-4539 R45 in December 2012 for $600,000 with a time adjusted sale amount of $568,805. The Board finds this sale to be appropriate evidence of the value of the subject property at $540,000. The Board notes that MPAC is only seeking to uphold its assessment as returned of $521,000 and not to factor in the higher valuation as per its valuation Report’s last minute adjustment to include the Bunkie/cabin value. Therefore, the Board finds it reasonable to confirm the assessment as returned for the taxation year 2015, in the amount of $521,000.

Equity Analysis

22The Act was amended for taxation years beginning with 2009 to require the Board to lower an assessment below current value if required to make the assessment equitable with the assessments of similar properties in the vicinity.

23Section 44.(3)(b) of the Act states that “…the Board shall…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 land.”

24To support the equity of assessment of the subject property, Mr. Fleming provided a study of the Assessment to Sale Rations (“ASR”) of 30 residential properties located within the vicinity of the subject property. The study has a range of individual ASRs from 0.67 to 2.31 and a median ASR of 1.01. Mr. Fleming suggests that a median ASR of 1.00 is indicative that similar properties in the vicinity of the subject property have been equitably assessed at their current values.

25Mr. Graham provided no argument or evidence under s. 44.(3)(b).

CONCLUSION

26Accordingly, the Board finds that there is no evidence before it leading to the conclusion that the current value of the subject property, as determined above, requires a further adjustment in accordance with s. 44.(3)(b) of the Act. Therefore, the appeals are resolved as follows:

Year

Appeal Number

Section

Decision

2014

3098229

40

Withdrawn

2014

3098230

34

Withdrawn

2015

3098232

32

Confirmed at value $521,000

2015

3098231

40

Changed from $485,000 to $521,000

2016

3143681

40

Confirmed at value $521,000