Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 04, 2017

FILE NO.: WR 144092

Assessed Person(s): Nancy Jane Worrell and Juan Ardila

Appellant(s): Juan Ardila

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 5 Trailsmoke Crescent

Municipality(ies): City of Toronto

Roll Number(s): 1919-033-210-03400-0000

Appeal Number(s): 3132032 and 3149698

Taxation Year(s): 2015 and 2016

Hearing Event No.: 625984

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

Heard: October 11, 2016 in Toronto, Ontario

APPEARANCES:

Parties

Representative

Nancy Jane Worrell and Juan Ardila

Self-represented

MPAC

Maria Cheung

City of Toronto

No one appeared

DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT

INTRODUCTION

1This appeal came before the Assessment Review Board (“Board”) to address s. 34 and 40 of the Assessment Act (“Act”), for taxation years 2015 and 2016 respectively. The Appellant is appealing the supplemental assessment for the 2015 taxation year as well as the assessment for the 2016 taxation year as being too high.

2The subject property, having an effective year built of 1999, is improved with a recent 686 square foot (“sq. ft.”) newly built addition above the double attached garage, bringing the total building area of the detached two storey house to 3,038 sq. ft. The property has an effective frontage and depth of 60 feet (“ft.”) and 100 ft. respectively, the quality classification given by MPAC is a 7. The property has a supplemental assessment in the amount of $322,000 as of March 1, 2015, and a deemed assessed value of $938,000 for the 2016 taxation years.

3Maria Cheung, appearing on behalf of MPAC, stated that the subject property warranted a supplemental assessment due to the newly built addition. However, in light of new evidence, MPAC is prepared to reduce the supplemental assessment from $322,000 to $80,000 for the 2015 taxation year, resulting in an overall assessment of $809,000 for the 2015 taxation year. In the matter of the 2016 taxation year, MPAC maintains its current value assessment as at $938,000, based on the evidence of the sales of similar properties in the vicinity of the subject property. In evidence Ms. Cheung provided the sales of six suggested comparable properties.

4Juan Ardila appeared as a self-represented Appellant.

5In the matter of the supplemental assessment, Mr. Ardila argued that over the past few years following issuance of the building permit (April 2012) for the new addition, unforeseen delays and personnel changes prevented them from using the new addition. The Appellant is asking the Board to consider applying the supplemental assessment effective 2016, the year that the space became usable. Mr. Ardila is also seeking a supplemental assessment of not more than $20,000. The Board notes the Appellant provided no evidence to support how he arrived at this amount as the suggested supplemental assessment.

6In the matter of the current value assessment for the 2016 taxation year, the Appellant provided into evidence, see (Exhibit 6), a compilation of 30 properties that sold between 2011 and 2012, sourced from the Toronto Real Estate Board, to support his argument that the property is over assessed and should be adjusted to $860,000 for the 2016 taxation year.

7The Board must determine two things, the appropriate supplemental assessment taking into consideration the newly built addition, and 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

8In the matter of the supplemental assessment and for the reasons stated below, the Board finds that the adjustment proposed by MPAC for the 2015 taxation year, to the new amount of $80,000 from $322,000 is reasonable.

9In the matter of the current value and for 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 confirmed at $938,000 for the 2016 taxation year.

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

11Accordingly the current value assessment of the subject property as at the valuation day, January 1, 2012, is confirmed at $938,000.

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.

Supplemental Assessment and Current Value for 2015

17Ms. Cheung of MPAC provided the Board with six sales of suggested comparable properties which she argues are similar to the subject property and in the same vicinity. One property in particular, 28 Burnt Log Crescent, was the best comparable for determining the current value assessment of the subject property, being un-renovated as is the subject property; having a similar site area of 6,600 sq. ft. versus 6,000 sq. ft. for the subject property; being very close in building total area to the subject property (prior to new addition); both properties constructed in the mid-1960s (1966 and 1965 respectively); and both have the same quality classification; however it has an outdoor pool whereas the subject property does not. MPAC’s 2015 current value assessment as returned was $729,000, prior to any supplemental adjustments, according to Ms. Cheung. The Appellant provided no suggested comparable properties.

18The Board places no weight on the sales of the remaining MPAC suggested comparable Properties A, B, and D to F. The Board finds that since these properties were either renovated and/or smaller in size, they were not comparable to the un-renovated subject property for the determination of a 2015 taxation year current value assessment.

19The Board agrees with MPAC’s selection of this comparable as best suited to determine the 2015 taxation year current value assessment of the subject property, taking into account that it had no renovations and adjusting for variations in lot depth and the existence of a swimming pool. The Board finds this comparable not only establishes the current value assessment for the 2015 taxation year, but also sets a baseline from which to address the supplemental assessment value.

20The Appellant argued that MPAC’s supplemental assessment of $322,000 did not reflect the true state of the then (2015) incomplete construction of the new addition, particularly the interior of the new addition. Mr. Ardila noted that MPAC never inspected the inside of the new structure in 2015. MPAC agreed that no inspection of the interior was performed in 2015, that only a drive-by inspection (April 16, 2015) of the exterior was conducted and references made to the building permit plans submitted by the Appellant on file with the City of Toronto, were used to derive the supplemental assessed value of $322,000. MPAC admitted it did not know at the time of the drive-by inspection, that the interior renovation was not complete. When this new information came to MPAC’s attention, an inspection occurred on September 6, 2016, with the recommendation to adjust the supplemental assessment to reflect the partial completion of the new addition in 2015, from $322,000 to $80,000, thereby resulting in a 2015 taxation year current value assessment of $809,000.

21The Appellant argued that occupancy of the new addition was not possible throughout 2015, as the required separate heating system had yet to be installed, and that any supplemental assessment should be applied only upon the new addition being usable. The Board notes that Mr. Ardila stated that as of late 2016, the separate heating system still had not been installed and that heating was being provided by the existing main furnace. It is the position of the Appellant that a $20,000 supplemental assessment would be reasonable to reflect the circumstances during the 2015 taxation year. The Board notes that it has no evidence before it by either party, to make a determination on the matter of when a supplemental assessment ought to be determined or applied. The Board has no mandate in the Act to address issues of occupancy and use in regards to supplemental assessments.

22The Board notes that the Appellant did not provide any evidence to support his position for a $20,000 supplemental assessment. The Board notes that MPAC, upon receiving new information on the state of construction/renovation of the new addition, appropriately made downward adjustments in their initial supplemental assessment proposal, from $322,000 to $80,000. As the onus reverses to the Appellant to support his recommendation, no evidence was provided to the Board to consider his position.

23The Board notes that it cannot speculate on matters and can only rely on the evidence submitted by all parties. For these reasons the Board gives no weight to the Appellant’s proposal for a $20,000 supplemental assessment and accepts MPAC’s downward adjusted value of $80,000 as being reasonable in light of the state of the 2015 newly constructed addition.

Current Value 2016

24Mr. Ardila stated that he is a real estate broker in the neighbourhood of the subject property, that he visits the interiors of properties and therefore has an advantage over MPAC. The Appellant provided to the Board as evidence, in the form of one page property details from the Toronto Real Estate Board, 30 suggested comparable properties that had sold between 2011 and 2012. Based on this evidence the Appellant is asking the Board to confirm $860,000 as the appropriate current value for the subject property as of the 2016 taxation year. The Board notes that no analysis of the evidence was provided by the Appellant, with no reference to any specific comparable properties to assist the Board to focus on the Appellant’s position.

25The Board notes inconsistencies in the available data, wherein some properties indicated approximate square footage ranges and other properties had no data. The Board cannot speculate as to the exact square footage of properties from a range, or the lack thereof, as provided in these submissions. The Board notes the authors of these documents were not available during the hearing for the Board to ask questions as to the standards of measure used and their qualifications. The Board is unable to give any weight to this evidence by Mr. Ardila in its determination of current value, as the Board is unable to rely on the accuracy of the property details as outlined in the documentation, particularly the square footage of the property and room dimensions.

26The Appellant suggested a more appropriate value for the subject property of $860,000. The Board finds no basis to support such a conclusion.

27The Board’s best evidence therefore relies on the suggested comparables provided by MPAC.

28Ms. Cheung of MPAC provided the Board with six sales of suggested comparable properties which she argues are similar to the subject property and in the same vicinity. Property D, 49 Thicket Road, is considered by MPAC to be the most comparable property to the subject. With a similar dwelling size and type of renovation as the subject property, being sold within one month of the January 1, 2012 valuation date, thus requiring minimal time adjustment in price, and adjusting for the presence of a swimming pool, which the subject property does not have, MPAC arrived at a market value for the subject property of $1,026,000. Although higher than the proposed current value assessment of $938,000, MPAC is not seeking a higher assessment, but that the Board confirms $938,000 as returned as reasonable and therefore the correct current value for the 2016 taxation year.

29The Board places no weight on the sales of MPAC’s suggested comparable Properties A to C, and E. Sales B, C and E are considered inferior to the subject, having undergone no renovations, whereas the subject property has a newly built addition over the garage. Sale A is considered superior to the subject, being totally rebuilt and therefore not easily comparable using the Direct Sales Comparison Method to determining current value. The Board finds Sale F, 91 Markland Drive and Sale D, 49 Thicket Road, most comparable to the subject property in terms of lot sizes, relative effective year built due to renovations, building total area and quality classification, most suited as comparables to determining current value for the subject property. The Board agrees with MPAC that Sales D and F provide a reasonable sale price range, with Sale F on the lower end and Sale D on the higher end of this range,

30For these reasons the Board confirms MPAC’s assessment of $938,000 as returned for the 2016 taxation year.

Equity Analysis

31The 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.

32Section 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.”

33For purposes of establishing equity, properties do not need to be comparable, they only need to be of a similar nature and within a reasonable proximity. Ms. Cheung of MPAC provided a study of the Assessment to Sales Ratio (“ASR”) of 30 residential properties located within 0.66 kilometers of the subject property. The study has a range of individual ASRs from 0.84 to 1.13 and a median ASR of 1.01. A value within five percentage points is usually considered an acceptable value. In this case the median ASR of 1.01 falls within an acceptable range and suggests that MPAC’s methodology may be producing assessments in line with sales. The Board therefore finds that no adjustment is required for equity in accordance with s. 44.(3)(b) of the Act.

34Mr. Ardila provided no argument or evidence under s. 44.(3)(b) to demonstrate inequity.

35Therefore the Board finds the current value assessment as returned to be equitable in comparison to similar properties in the vicinity of the subject property.

CONCLUSION

36Accordingly, 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.

37Accordingly, as at the valuation day, January 1, 2012, the supplementary assessment of the subject property for the 2015 taxation year is reduced from $322,000 to $80,000. Furthermore, the assessment for the 2016 deemed taxation year is confirmed at $938,000.