Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: August 08, 2017
FILE NO.: WR 146692
Assessed Person(s): Scott Andrew Kirkham
Appellant(s): Scott Andrew Kirkham
Respondent(s): Municipal Property Assessment Corporation (“MPAC”), Region 05
Property Location(s): 2130 Eel Bay Road
Municipality(ies): Township of South Frontenac
Roll Number(s): 1029-050-040-72600-0000
Appeal Number(s): 3195855
Taxation Year(s): 2016
Hearing Event No. 678067
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: April 12, 2017 in Sydenham, Ontario
APPEARANCES:
| Parties | Representative |
|---|---|
| Scott Andrew Kirkham | Self-represented |
| MPAC | Marsha Blakely |
| Township of South Frontenac | No one appeared |
DECISION OF THE BOARD DELIVERED BY ROBERT NERON
INTRODUCTION
1The subject property is a waterfront single-family residence on Sydenham Lake. Built in 1964, but renovated in 2012, the house is a two-storey structure with a total living area of 1,227 square feet on the first and second floors. The house does not have a basement. The property contains a boathouse of 243 square feet built in 2014 and a second single-family property of 923 square feet built in 1978. The house contains one full bathroom and three bedrooms. The lot has a frontage of 460 feet on the water and the shoreline is considered shallow.
2The subject property was originally assessed at $406,000, but the assessor has since recommended that it be reduced to $381,000. Scott Andrew Kirkham (“Appellant”) requests that the assessment be set at the most at $350,000.
ISSUE
3The issues are to determine the current value of the property and ensure that the current value is equitable relative to the assessed values of similar properties in the vicinity.
DECISION
4I find that the current value of the subject property is $406,000. However, I also find that it would be inequitable to assess the subject property at its current value and therefore reduce the assessment from $406,000 to $378,000, in order to achieve a fair and equitable assessment with similar properties in the vicinity.
REASONS FOR THE DECISION
The Subject Property
5The subject property is a multiple-building single-family residence located in the Township of South Frontenac, in the former District of Loughborough, and includes a frontage on Sydenham Lake, which is also known as Little Long Lake and Eel Bay.
The Legislation
6The following provisions of the Assessment Act (“Act”) instruct the Board in appeals of this nature.
7Section 1 of the Act defines current value as follows:
“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.
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 44.(3)(a) and (b) 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.
10Section 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.
11Section 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.
Current Value
12Under the Act, I am required to do two things:
Find the current value of the property;
Make reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the subject property to make it equitable with the assessments of those properties, but only if the adjustment will result in a reduction in the assessment.
13The best evidence of current value would be a sale of the subject property on the valuation date of January 1, 2012. The Appellant purchased the subject property for $410,000 in July 2012, seven months after the valuation day. This is a strong indication of current value. However, I must also look to the sale of similar properties in the vicinity to determine if that evidence of current value is supported.
14MPAC presented the sales of five comparable properties to support its suggested current value of the subject property. According to MPAC, the most comparable sale to establish the value of the subject property was the sale of a property1 built in the same years as the subject property but containing a smaller frontage, a finished basement, a smaller lot, and a garage built in 2000. The time adjusted sale price of this property is $436,271.
15The Appellant presented the assessments of four comparable properties to establish the value of his property. He submits that the most comparable property is a neighbouring property2. The property has a current assessed value of $302,000 but contains a smaller frontage (105 feet versus the subject property’s 330 feet) and does not have outbuildings (unlike the subject property, which includes an additional 923 square-foot home). This property has also been rated at a lower quality of construction than the subject property (five versus six).
16I have reviewed all the comparable properties and, based on the evidence presented by the parties, these sales show that the sale of the subject property was likely at market. Moreover, the subject property has two houses built on it in addition to a new boathouse, which makes, in my view, this property unique. Consequently, I am unable to determine the property’s current value from these other properties.
17The best evidence that I have to establish the value of the subject property is that it was purchased in July 2012, seven months after the valuation date, for $410,000. I agree with MPAC that this purchase record is a good indicator of the market value of the property at the time.
18The Appellant argued that the property was not worth what he had paid to purchase it. However, I agree with MPAC that this purchase constitutes an arm’s-length transaction in the open market and so is a clear indicator of the value of the property near the valuation date.
19On that basis, I agree with MPAC that the current value assessment of the subject property of $406,000 is reasonable, considering the property was purchased on July 20, 2012, for $410,000. I find the current value of the subject property to be $406,000.
Equity Analysis
20Section 44.(3)(b) mandates and directs that after determining current vale, I must have reference to the value at which similar lands in the vicinity are assessed.
21The Assessment to Sales Ratio (“ASR”) is determined by dividing the assessment as returned by the time-adjusted sale price. An ASR falling below 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments below values determined in the marketplace. Conversely, an ASR above 1.0 is an indication that MPAC’s valuation methodology may be resulting in assessments above values determined in the marketplace.
22The Appellant presented no equity arguments.
23MPAC relied on thirty sales within 8.27 kilometres from the subject property between January 2011 and December 2012. The average ASR for these properties is 0.91, and the median ASR for the sold properties is 0.93, which is below the generally acceptable range of 0.95–1.05.
24An ASR of 0.93 shows that property in the vicinity is, on average, assessed at 93% of its current value. I agree with MPAC that assessing the subject property at is current value of $406,000 is not equitable because similar lands in the vicinity are assessed below their current values.
25Based on the evidence before me, I find that an equity adjustment is warranted for the subject property. Therefore, I reduce the assessment below current value to make it equitable with the assessment of similar lands in the vicinity to $377,580 (0.93 x $406,000), which I would round to $378,000.
CONCLUSION
26The current value of the subject property is $406,000. However, it would be inequitable to assess the subject property at its current value. I therefore reduce the assessment from $406,000 to $378,000 for the taxation year of 2016.
“Robert Neron”
ROBERT NERON MEMBER 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