Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: February 23, 2016
Assessed Person(s): Lucille Louise Alcock and Trevor Alexander Alcock
Appellant(s): Lucille Louise Alcock and Trevor Alexander Alcock
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 28
Respondent(s): Municipality of West Nipissing
Property Location(s): WS20-1 Island S-20 McLeod Bay PCL
Municipality(ies): Municipality of West Nipissing
Roll Number(s): 4852-040-003-02100-0000
Appeal Number(s): 2994142, 3029427 and 3093108
Taxation Year(s): 2013, 2014 and 2015
Hearing Event No.: 603648
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: November 18, 2015 in West Nipissing, Ontario
APPEARANCES:
Parties Representative
Lucille Louise Alcock and Trevor Alexander Alcock Self-represented
MPAC John Hyatt
Municipality of West Nipissing Louise Laforge
DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA
INTRODUCTION
1The Alcock property is a Seasonal/Recreational Dwelling – First Tier on Water, located at Island WS20-1 at the mouth of Cache Bay on Lake Nipissing, in West Nipissing. It has a lot area of 39,204 square feet (“sq. ft.”). The one-storey cottage, built in 1935, has 352 sq. ft. of total building area.
2Assessments were returned for the 2013 taxation year at $150,000 and for the 2014 and 2015 taxation years at $92,000. John Hyatt, representing MPAC, testified that the difference represents the $92,000 s. 39.1 Minutes of Settlement (“MOS”) offered by MPAC during the Request for Reconsideration (“RFR”) process. MPAC offered a reduction to reflect the location of the Alcock property in the less desirable Cache Bay area on Lake Nipissing and the condition of the dwelling. The offer was rejected by the Appellants.
3Mr. Hyatt assessed the current value of the Alcock property using the direct sales comparison approach and provided information on four sales of island properties that took place between 2010 and 2013 (Exhibit 1). The sales information provided to the Assessment Review Board (“Board”) included key features of these properties, in order to compare them with the Alcock property. The actual sale price of each property was listed, along with a time-adjusted price showing the likely value of those properties on the valuation date of January 1, 2012. Mr. Hyatt considers Sale C to be most comparable to the Alcock property. Taking into account Sale C’s superior condition and location, he is of the opinion that a current value assessment of $92,000 is reasonable.
4The Alcocks object to the assessment of their property based on a number of concerns: their property is a small island with less than one acre, surrounded by weeds; it is used mostly for duck hunting in the fall; it is in Cache Bay which is full of weeds; it is not a high sale area; they have not put anything into maintaining the building. They are of the opinion that it is assessed too high and should be more reasonably assessed at $70,000. Mrs. Alcock expressed her concern that there should be a cap on the amount an assessment can be increased. The initial 2012 current value assessment increased by 200% to $150,000. They rely on the 2013 sale of a neighboring island, Frazer Island. The Board permitted key features of this property which had not been disclosed in advance to be introduced by the Alcocks at the hearing (Exhibit 2). Mr. Hyatt kindly confirmed the details of two sales on the property and the 2012 current value assessment.
5This appeal raises two issues: does the assessment of $92,000 reflect the current value of the land; and should the assessment be adjusted to make it equitable with the assessments of similar lands in the vicinity.
DECISION
6The Board sets the current value of the Alcock property, as of the valuation day of January 1, 2012, at $92,000 and finds that it does not require a further adjustment under s. 44.(3)(b) of the Assessment Act (the “Act”) in order to make it equitable with similar lands in the vicinity.
7Accordingly, for the 2013 taxation year, the assessment of the subject property is reduced from $150,000 to $92,000 and is confirmed at $92,000 for the 2014 and 2015 taxation years.
REASONS FOR DECISION
The Legislation
8For the 2013, 2014 and 2015 taxation years, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act.
9Section 19.(1) of the Act states that the assessment of the land shall be based on its current value. Current value is defined in s. 1 to mean, 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) of the Act provides that for the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012. Section 19.2(1)(3) of the Act provides that 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. Therefore, for the 2013, 2014 and 2015 taxation years, land is valued as of January 1, 2012.
11In determining the value at which the land shall be assessed, s. 44.(3) of the Act requires that the Board (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.(17) of the Act provides that, where value is the ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.
13After hearing the evidence and the submissions of the parties, the Board shall determine the matter pursuant to s. 40.(19).
The Board’s Analysis
Current Value
14The initial task of the Board is to use the best evidence available to determine the current value of the Alcock property as required by s. 1 and s. 19.(1) and s. 44.(3)(a) of the Act.
15The 200% per cent change in the assessment over the previous assessment cycle is not evidence on which the Board can make a decision. Each cycle is a new assessment cycle, and change in the assessed values of properties from four years before is not relevant to the current value. Percentage increases may vary widely as previously under-assessed and over-assessed properties are brought closer to their correct current values. The best evidence the Board can receive of current value is arm’s length sales of comparable properties located nearby, as close as possible to the valuation date of January 1, 2012.
16The Board has five sales to consider.
17The Board rejects MPAC’s sales A, B, C and D.
Sale A – Island WS-13 is a vacant island with a lot size of 2.7 acres which is approximately 66% larger than the Alcock property at 0.9 acres. It is not directly comparable.
Sale B – Island WS34-1 has a lot size of 1.35 acres but is improved with a much newer and larger structure. Also, from the Market Analysis Map included in Exhibit 1, it is not located on Cache Bay, rather on Lake Nipissing and more in the direction of Lavigne. It is not directly comparable.
Sale C – Island WL 10-1 has a lot size of 0.8 acres which is slightly smaller than the Alcock property. It is improved with a structure similar in age and size. The property sold for $145,000 in August 2011. However, it is located in a different part of the lake, namely in the West Arm of Lake Nipissing and subject to different variables. Appendix A: Market Analysis included in Exhibit 1 also indicates that it is located in a different Sub/Homogeneous neighborhood: W99. It is not directly comparable.
Sale D – Island WB210-1 has a lot size of 1.5 acres and is improved with a newer structure of similar size. It sold for $145,000 in November 2010. However, it is located near Sandy Island, a superior location on Lake Nipissing given its proximity to the French River. Appendix A: Market Analysis included in Exhibit 1 also indicates that it is located in a different Sub/Homogeneous neighbourhood: W62. It is not directly comparable.
18The Board also has a fifth sale, Island WS17-1, “Frazer Island”, to consider and which is relied on by the Alcocks. Island WS17-1 has a lot size of 1.4 acres and is improved with a newer 768 square foot structure built in 1999. It sold in 2013 for $108,000 (and again in 2015 for $110,000). A time adjusted sale value was not available. The assessment was adjusted to $156,000 from $222,000. It appears to be the property closest in proximity to the Alcock property and subject to the same types of variables due to its location near the mouth of Cache Bay. This is supported by information contained in Exhibit 2 that references Mcleod Bay for both Frazer Island and the Alcock property in Homogeneous neighbourhood W12. While Frazer Island and the Alcock property share many similarities in terms of location, lot size and being subject to similar variables, Frazer Island is improved with a much newer and larger structure. Both parties agree that there are not a lot of island sales. The Board finds that Frazer Island is the best available evidence of current value. Given that Frazer Island is improved with a much newer and larger structure, one would expect this superior property to sell for more than the Alcock property’s recommended value of $92,000. The Alcocks are of the opinion that $70,000 is a more reasonable value. However, in the absence of any other quantitative evidence or the opinion of an experienced local appraiser/real estate broker, to support a downward adjustment, the Board sets the current value of the subject property at $92,000 as at January 1, 2012.
Equity with Similar Lands in the Vicinity
19The Board must also consider the assessments of similar properties in the vicinity and determine whether the correct current value as established is inequitable relative to those assessments. If so, it should be adjusted to make it equitable, as required by s. 44.(3) of the Act.
20For purposes of establishing equity, properties do not need to be comparable, they need to be of a similar nature and within a reasonable proximity. The assessment to sale ratios (“ASR”) from a reasonable sample of sold properties is usually the best indicator for that purpose. Mr. Hyatt submitted an Equity Analysis (Exhibit 1) that considered 30 arm’s length sales of residential properties within 6.33 kilometers of the subject property that took place between January 2008 and December 2012. They produced a median ASR of 1.01, which is within the acceptable standard of 0.95 to 1.05 required to establish that properties have been assessed at their current value.
21The Board, therefore, finds that no adjustment is required for equity in accordance with s. 44.(3)(b) of the Act.
CONCLUSION
22The Board sets the current value of the Alcock property, as of the valuation day of January 1, 2012, at $92,000 and finds that it does not require a further adjustment under s. 44.(3)(b) of the Act in order to make it equitable with similar lands in the vicinity.
23Accordingly, for the 2013 taxation year, the assessment of the subject property is reduced from $150,000 to $92,000 and is confirmed at $92,000 for the 2014 and 2015 taxation years.
“Marcelle Bourassa”
MARCELLE BOURASSA VICE-CHAIR
Assessment Review Board A constituent tribunal of Environment and Land Tribunals Ontario Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```