Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 26, 2017 FILE NO.: WR 144443

Assessed Person(s): Nina Dumitra Appellant(s): Nina Dumitra Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 7 Respondent(s): Township of Minden Hills

Property Location(s): 1034 Emerald Lane Municipality(ies): Township of Minden Hills Roll Number(s): 4616-051-000-54600-0000 Appeal Number(s): 3139856 and 3146000 Taxation Year(s): 2015 and 2016 Hearing Event No.: 641764

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

Heard: November 8, 2016 in Minden, Ontario

APPEARANCES:

Parties	Representative
Nina Dumitra	Mr. Dumitra
MPAC	Mary Hennessey
Township of Minden Hills	No one appeared

DECISION OF THE BOARD DELIVERED BY MARILYN SHARMA

INTRODUCTION

1The subject property is a seasonal/recreational dwelling located at 1034 Emerald Lane in Minden, Ontario.

2The building was constructed in 2009 and is a two-storey structure with a first floor area of 984 square feet (“sq. ft.”), a second floor area of 580 sq. ft. for a total building area of 1,564 sq. ft.

3The effective site area of the property is 16,117 sq. ft. with a frontage of 130.3 feet (“ft.”).

4The property has access to hydro facilities, however water is provided by a private well and sanitary facilities are provided by a septic system located on the property. The topography of the property is described as being steep slope.

5The assessment of the property for the 2015 and 2016 taxation years is $173,000.

6The Appellant argues that MPAC has over-assessed his property and believes that the assessment is excessive in relation to similar properties in the neighbourhood.

ISSUE

7The issue before the Assessment Review Board (“Board”) is to determine whether the subject property is overvalued in relation to similar properties in the neighbourhood.

DECISION

8The Board finds that the current value of the subject property is $280,000 (rounded).

9The Board has made reference to similar lands in the vicinity and finds that a reduction is required for equity under s. 44.(3)(b) of the Assessment Act (“Act”) and reduces the revised current value from $280,000 to $269,000 (rounded).

10The Board notes that the current value established by the Board is higher than the assessment as established by MPAC. Since no party requested an increase in the assessment of the subject property, the Board therefore confirms the assessment of the subject property in the amount of $173,000 for the 2015 and deemed 2016 taxation years.

11Accordingly, as at the valuation day, January 1, 2012, the assessment of the subject property for the 2015 and 2016 taxation years is confirmed in the amount of $173,000.

REASONS FOR DECISION

The Legislation

12For the 2015 and 2016 taxation years, in determining the value at which land shall be assessed, the Board must have regard to the following provisions of the Act:

13Section 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.

14Section 19.(1) of the Act states:

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

15Section 19.2(1)2 of the Act states:

19.2 (1) Valuation days. – 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.

(5) Exception. – 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.

16Section 44.(3) of the Act 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.

17Section 40.(17) of the Act states:

40.(17) Burden of proof. – For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

18Section 40.(19) of the Act states:

40.(19) Board to make determination. – After hearing the evidence and the submissions of the parties, the Board shall determine the matter.

Analysis

19Under the Act the Board is required to do three things:

(1) Find the current value of the property;

(2) Make reference to the value at which similar lands in the vicinity are assessed;

(3) Adjust the assessment of the subject property if the adjustment would result in a reduction in the assessment.

Current Value

20The best measure of current value is an arm’s length and market tested sale of the subject property on or around the valuation day of January 1, 2012. If no such transaction took place, a further measure of current value is the arm’s length and market tested sales of comparable properties in the same vicinity and market. This measure acts as a benchmark and gauge of the correctness of the assessed value of the subject property. The onus for establishing the correctness of the current value lies with MPAC.

MPAC’s Evidence

21MPAC submitted five suggested comparable properties shown in Table 1 (Exhibit 1).

MPAC’s Suggested Comparable Properties

Table 1

Address	Site Area	Building Area (sq. ft.)	Year Built	Sale Date	Adj. Sale Amount ($)	Assessment ($)
1034 Emerald Lane, Minden (subj. property)	16,117 sq. ft.	1,564	2009	nil	nil	173,000
8316 Highway 35	n/a	1,971	1973	April 2011	410,555	205,000
1103 Clear Lake Road	5.16 acres	1,749	1983	June 2011	229,815	219,000
1395 Denna Lake Road	5.25 acres	1,092	2001	Dec. 2012	235,644	173,000
1379 Hunter Creek Road	1.0 acre	1,924	1974	April 2012	309,326	267,000
6367 County Road 121	46.13 acres	916	1997	October 2012	236,573	201,000

22The assessor stated that in her opinion her suggested properties are comparable to the subject property because they are located in the same homogeneous neighbourhood as the subject property, they are of similar quality class and similar building areas with the exception of the property located at 6367 County Road 121 which is 41% smaller than the subject building. She stated that the subject building is newer than all her suggested comparable properties.

23The assessor informed the Board that the subject property has the lowest assessed value in relation to all her suggested comparable properties except for the property at 1395 Denna Lake Road which has the same assessed value.

24The assessor stated that MPAC took into consideration the steep topography of the subject property and classified the lot as “fair”. The assessor further stated that given that the subject property had been listed for a sale price of $224,000, this, together with the lot being classified as fair, is an indication that the assessed value is reasonable.

25The assessor further stated in her submission (Exhibit 1) that:

I have reviewed sales for the period January 2011 to December 2012. My analysis indicates that house prices decreased approximately 4.1 percent over this timeframe in the subject property’s vicinity

26The assessor presented to the Board a copy of a current sales listing for the subject property which describes the property as a custom-built brand new home which “shows to perfection” with a list price of $200,000.

27The assessor advised the Board that MPAC conducted an on-site inspection of the property in 2015 and established that the construction was fully completed as of September 2014.

Appellant’s Evidence

28The Appellant stated that in his opinion, the dwelling is incomplete for the following reasons:

1. There is no water line to the property;
2. The water-well does not have a pump;
3. The septic system did not pass municipal inspection;
4. The bathrooms are incomplete;
5. The kitchen cannot be used because there is no water.

29The Appellant informed the Board that the subject property has been on the market for three seasons and the only offer he received was in 2016 for a sum of $160,000; however this was conditional on him including in the sale price an adjacent vacant lot and that the vendor would be taking back the mortgage.

30The Appellant stated that he does not believe that the suggested comparable properties submitted by MPAC are comparable to his property because they are situated in better locations and they have larger land and/or building sizes.

31The Appellant claims that in order for the subject property to be brought up to acceptable living conditions, a buyer would have to invest a significant amount of money. He believes that he should not have to pay taxes on a property that is not livable.

32The Appellant informed the Board that the description of his property in the sales listing was presented in the most favourable light and does not reflect his view regarding the unfinished state of the building. He stated that the description was the opinion of the Sales Agent.

Analysis of Evidence

Analysis of MPAC’s Evidence

33The Board considered the evidence presented by MPAC regarding the five suggested comparable properties. The Board notes that while the assessor’s evaluation states that the five suggested comparable properties submitted by MPAC are superior to the subject property; the Board believes that the four properties located at 8316 Highway 35, 1103 Clear Lake Road, 1395 Denna Lake Road and 1379 Hunter Creek Road with similar building sizes, similar quality class and the fact that they are all located in the same homogenous neighbourhood render them to be suitably comparable for establishing current value. The Board rejects the suggested comparable property located at 6367 County Road 121 as similar to the subject property since it is 41% smaller in building size and has a lot size that is 46.13 acres when compared to the subject lot which is less than one acre.

34The Board considered the argument advanced by the assessor in which she compared the assessed values of her five suggested comparable properties to the assessed value of the subject property and concludes that because the subject property has the lowest assessment it is therefore a reasonable assessment. The Board is not satisfied with the assessor’s conclusion that the assessed value of the subject property is reasonable based on a comparison of the assessed values of the five suggested comparable properties. The Board finds there is no basis for establishing current value of the subject property based solely on comparing the assessments of other properties given that among other things, there is no information as to how the assessments of these properties were established in the first place.

35The Board reviewed the suggestion made by the assessor that the assessed value of the subject property was reasonable because the property was once listed for sale at $224,000 given the somewhat inferior condition of the property which is described as being “fair” due to its steep topography. The Board rejects this conclusion for two reasons; firstly the Board was not presented with any evidence to demonstrate that there is a positive correlation between the “list price” of a property and its “assessed value”. Secondly, if the intention was to correlate or analyze the “sale” of a property with its “assessed value” that would be a more acceptable analysis; however, as indicated by the Appellant, the property did not sell at the list price.

36The Board accepts the assessor’s evidence that MPAC conducted an on-site inspection of the property and concluded that based on the said inspection that the building construction was fully completed. The Appellant provided no evidence to show otherwise.

37The Board reviewed the 2016 sales listing of the subject property submitted by the assessor and notes that while the list price of $200,000 asked by the Appellant is not conclusive evidence of value, it nevertheless provides an indication of the expected value as perceived by the Appellant in 2016. The Board however rejects this as an indicator of the current value.

Analysis of the Appellant’s Evidence

38The Board considered the argument made by the Appellant that the building is unfinished and that it is not habitable because there is no water line to the property, the water-well does not have a water pump, the septic system did not pass the municipal inspection and the bathrooms are incomplete. The Board could not give credence to the Appellant’s claims that the building is unfinished since he provided no evidence to support his claim such as a property inspection report from a professional that could substantiate his claim or dispute the claim by the assessor. In addition, his claim is seriously at odds with the on-site inspection report conducted by MPAC as well as the Sales Listing of the subject property both of which listed the building as being fully finished.

39The Board noted the Appellant’s claim that the property was on the market for three seasons and the only offer he received was for a price of $160,000 and this offer is indicative of the value of his property. The Board was not presented with any evidence to show such an offer existed and is therefore unable to give it any consideration.

40The Board considered the argument that the property is not in a habitable state and needs extensive work to bring it up to acceptable standards and that a buyer would have to invest large sums of money to do so. The Appellant did not provide the Board with estimates of such remedies or cost to cure the defects. In the absence of reliable evidence the Board is unable to give credence to the Appellant’s argument.

Determination of Current Value

41The Board finds that the best method to determine the current value of the subject property is based on sales evidence.

42The Board having accepted the properties at 8316 Highway 35, 1103 Clear Lake Road, 1395 Denna Lake Road and 1379 Hunter Creek Road as suitably comparable properties and all having valid sales, finds that the average sale price per square foot is $179.

43The Board applies the average price per square foot of $179 to the building area of the subject property of 1,564 sq. ft. and finds that the current value is $279,956 or $280,000 rounded.

44The Board finds that the current value of the subject property is $280,000.

Equity with Similar Lands in the Vicinity

45The Board is required under s. 44.(3) sub-paragraph (b) of the Act, to 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.

46The assessor indicated that she reviewed sales over the period January 2011 to December 2012 and found that house prices in the subject area had decreased by 4.1%. The Board accepts the assessor’s findings and applies the 4.1% reduction to the current value of the subject property. The Board therefore finds that an adjustment is required for equity under s. 44.(3) sub-paragraph (b) of the Act and applies this reduction to the revised current value of the subject property.

47The Board therefore reduces the current value of the subject property from $280,000 to $268,520.

CONCLUSION

48The Board finds that the current value of the subject property is $280,000 (rounded).

49The Board has made reference to similar lands in the vicinity and finds that a reduction is required for equity under s. 44.(3)(b) of the Act and reduces the revised current value from $280,000 to $269,000 (rounded).

50The Board notes that the current value established by the Board is higher than the assessment as established by MPAC. Since no party requested an increase in the assessment of the subject property, the Board therefore confirms the assessment of the subject property in the amount of $173,000 for the 2015 and 2016 taxation years.

51Accordingly, as at the valuation date, January 1, 2012, the assessment of the subject property for the 2015 and 2016 taxation years is confirmed in the amount of $173,000.