Ianshiao Yuan v. Municipal Property Assessment Corporation, 2017 CanLII 54432

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 16, 2017

FILE NO.: WR 145342

Assessed Person(s): Ianshiao Yuan

Appellant(s): Ianshiao Yuan

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

Respondent(s): City of Toronto

Property Location(s): 14 Wingstem Court

Municipality: City of Toronto

Roll Number(s): 1908-054-400-01363-0000

Appeal Number(s): 3177055

Taxation Year(s): 2016

Hearing Event No.: 648566

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

Heard: January 19, 2017 in Toronto, Ontario

APPEARANCES:

Parties Representative

Yuan Ianshiao Self-represented

MPAC Robert Di Poce and, Jeffrey Batcher

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 determine the current value of the land portion of the subject property for the 2016 taxation year. A semi-detached residential property, the subject is part of a newly-built subdivision from 2015, which was built on a large subdivided parcel of land in 2014, formerly consisting of detached and semi-detached 1940s and 1950s residential properties.

2As of the legislated January 1, 2012 valuation date, the subject property had a returned current value assessment (“CVA”) of $520,000.

3Jeffrey Batcher and Robert Di Poce appeared on behalf of MPAC, as Property Valuation Analyst and Valuation Review Specialist, respectively. Mr. Batcher stated that the subject property's CVA of $520,000 had been established using the Direct Comparison Approach to Value. However, in light of the nearby power transformer installation three properties from the subject, a downward adjustment of an additional 11% is applied to address the nuisance factor, thereby arriving at a new CVA of $462,000. MPAC believes this modified value better reflects its position. In evidence Mr. Batcher provided the sales of five suggested comparable properties that MPAC considers as “vacant land sales” and therefore suited for the purposes of supporting the recommended assessed value for the subject property, of $462,000.

4Yuan Ianshiao, also referred to as Amanda Ianshiao (“Appellant”), the owner of the subject property, appeared as the self-represented Appellant before the Board. The Appellant argued that her property is over assessed and asked the Board to accept a CVA between $238,000 and $268,000 for the 2016 taxation year, based on the January 1, 2012 valuation date.

5The Appellant provided calculations, based on MPAC's comparables, to argue her alternate CVA, (Exhibit 5), utilizing a dollar rate per square foot ("$/sq.ft") approach. Ms. Ianshiao argued that lot size, lot frontage and depth do play a determining role towards the assessed value of the subject property, contrary to MPAC's position that location is sufficient as the subject land as well as the five comparables are of equal development potential.

6The Board must determine two issues, 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

7For 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 $298,054for the 2016 taxation year.

8The Board finds that no equity adjustment is required of the subject property, in accordance with s. 44.(3)(b) of the Act.

9Accordingly the assessment of the subject property for the 2016 taxation year is reduced from $520,000 to $298,054.

REASONS FOR DECISION

Current Value Analysis

10The 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…”

11Section 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…”

12The 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. In this appeal MPAC has provided five properties deemed to be similar to the subject as vacant land sales. The Appellant has also put into evidence an additional property sale, but has accepted MPAC's comparables in her analysis and evidence submissions to argue her position.

13To enable an estimate of current 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. In this instance MPAC argues similarity in terms of location and property type, namely same neighbourhood and vacant land, are the key elements of similarity to determine value. The Appellant however, disputes MPAC's selected elements of similarity and argues the inclusion of additional physical factors such as lot size, land frontage, and proximity to negative external structures should also be considered. Amanda Ianshaio also addresses location issues such as proximity to neighbourhood amenities, transit and superior/inferior neighbourhood attributes, in determining the CVA for the subject lands.

14Lastly, current value determination is time dependent. To be indicative of market 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. In this instance MPAC and the Appellant have provided vacant land sales as comparables to the subject property, that fall at most within nine months on either side of the valuation date.

Determining Current Value For 2016

MPAC's Position

15Mr. Batcher provided the Board with five properties of vacant land sales as suggested comparables for the purposes of his analysis in MPAC's Valuation Report ("Report"), see Exhibit 1. In the 'Analysis' section of the Report, page 2, Mr. Batcher states that all of these sales were transacted with older homes on the land, but viewed as vacant land sales. Both, Mr. Batcher and Mr. Poce stated before the Board the difficulty of locating vacant land in the neighbourhood and beyond, thereby resorting to selecting properties with older structures that can be viewed as “vacant land sales” in this instance.

16The Report states the average sale amount for the five comparable properties is $597,600 and the median sale being $620,000. The Report also indicated that vacant land value in the subject's neighbourhood of B43 has a base land value of $303,309.00 which reflected the fixed value associated with site preparation, in-place municipal services and other fixed portions, regardless of lot size, living area, etc. in his Report, Mr. Batcher stated that the current value of the subject property falls below the average sales values of the comparables.

17The position of MPAC is not readily apparent from the data associated with the five comparable properties, particularly if relying on location and property type alone. The Board notes that MPAC gave no consideration to lot size, frontage or depth of lot in determining what is the subject's assessed value. The Board acknowledges MPAC's position that vacant land development potential may outweigh the need to include other elements of similarity. However, the Board is not persuaded by the oral evidence from MPAC to accept this position. No quantitative evidence was offered by MPAC, in this instance, to support the position that development potential outweighs other elements of similarity, nor demonstrating how it affects value. On a quantitative level, the property elements for similarity are not considered. MPAC has not been persuasive in its submission evidence to the Board, of highlighting the relationship between location alone and value to arrive at a current value for the subject property. For this reason the Board gives no weight to the position presented by MPAC regarding vacant land development potential being the same for all comparable properties including the subject property, regardless of lot frontage, lot size, etc.

18Mr. Batcher argued during the hearing, that these properties are similar to the subject property, and are lands considered neither superior, nor inferior to the subject property. The Board notes that no persuasive evidence was provided by MPAC to demonstrate that the lands were neither superior nor inferior to the subject. For this reason the Board gives no weight to MPAC's contention that none of the properties are superior or inferior to the subject property.

19The Board notes it is incumbent on all parties to present their best evidence before the Board, to enable it to make a factual determination of current value, based on the evidence.

Appellant's Position

20MPAC's preference for location as the prime element for similarity, notwithstanding the properties being of similar type, namely vacant land, is challenged by the Appellant, noting that lot sizes of all the comparables are significantly larger than the subject and need to be adjusted if a comparison is to be made to the subject property. The Board notes from the evidence submitted, that lot sizes are significantly larger than that of the subject property, by more than two times in lot frontage and lot area in many cases. Refer to the Table on the page 8.

21While both parties have acknowledged they are using the comparables provided by MPAC as evidence, the Board notes a significant physical proximity variation to the nuisance transformer for the subject property in contrast to the comparable properties. The Board understands the downward adjustment due to the proximity of the transformer to the subject property. However, it notes that none of the comparables used by MPAC, although considered within the same neighbourhood, have any adjustment for the nuisance of the transformer in terms of location. Exhibit 2, indicates a considerable distance from the transformer for the five comparables. The Appellant expressed this matter before the Board during the hearing , highlighting in her opinion the superior location of the comparable properties to that of the subject, remarking better proximity to transit, major streets such as Sheppard Avenue and Bathurst Street, and larger property lots. MPAC disputes the Appellant's opinion, arguing that all the properties are within the same homogeneous neighbourhood. While the Board agrees with MPAC that all the properties are within the same homogeneous neighbourhood, none of the comparables have any downward adjustments for the transformer, the Board notes these differences are worthy of consideration.

22Upon review of the suggested comparable properties provided by MPAC, noting in particular the elements of lot size, frontage etc, the Board finds all the comparable properties to be superior in all respects to lot size and frontage to that of the subject property, in contrast to MPAC's position that all lands are neither superior nor inferior. The Board notes that no persuasive evidence was provided by MPAC to justify not making any association to the lands being superior or inferior.

23The Appellant presented evidence, Exhibit 5, using MPAC's suggested comparables, as well as 65 Combe Avenue submitted as evidence by the Appellant. Using the dollar rate to square foot approach, the Appellant applied the average sale value of $597,600 and divided by the average lot size of 7009.74 to arrive at a dollar rate of $85.25 sq.ft. Applied to the lot area of the subject property, the Appellant arrived at the value of $298,054. Accounting for the negative influence of the transformer (-10%), the Appellant's recommended value is $268,248 as the CVA for the subject property. The Table below illustrates the Appellant's position that the lot sizes of all the comparable properties are significantly superior to the subject's and should be taken into consideration as a factor in determining value, as her computations above illustrate.

TABLE

	Subject	Property 1	Property 2	Property 3	Property 4	Property 5
Property	14 Wingstem Crt	27 Codsell Ave	77 Waterloo Ave	177 Waterloo Ave	180 Codsell Ave	96 Brighton Ave
CVA	$520,000	$567,000	$560,000	$541,000	$586,000	$547,000
Base Year	2012	2012	2012	2012	2012	2012
Sale Date		2011/10	2012/04	2012/09	2012/08	2011/04
Sale Amt		$580,000	$620,000	$620,000	$718,000	$450,000
ASR		0.98	0.90	0.87	0.82	1.22
E.Frontage	24.61	50.00	53.00	50.00	65.00	52.19
E. Depth	142.09	154.25	134.29	128.34	120.00	115.00
E.Site Area	3,496.23	7,712.50	7,117.37	6,417.00	7,800.00	6,001.85

24The Board notes that some evidence presented by the Appellant to the Board is not acceptable, namely the two unsold properties on the same street as the subject, Exhibit 7, as well as 65 Combe Avenue, Exhibit 6, as it is not vacant land and therefore not comparable, the Appellant has provided a compelling analytical argument for an alternate value by addressing the quantifiable nature of lot dimensions for similar lands as a means to determine current value.

25While the Board accepts MPAC's suggested properties as comparables to the subject property, the Board is not persuaded to treat all comparables including the subject property as having equal development potential, discounting the role of other elements of similarity, such as lot size, frontage, etc. in the determination of current value. The Board furthermore is not persuaded to accept MPAC's view that none of the properties are superior or inferior, for the same reasons as above. Accordingly, the best evidence to make a determination of current value is MPAC's suggested comparable properties and the Appellant's approach to value utilizing a variety of elements of similarity as evidence.

26The Board finds the Appellant's analysis of the evidence persuasive towards supporting a downward adjustment of the subject's current value assessment. As the determination of current value is for the land portion of the subject property, it is the position of the Board that any downward adjustment for proximity to the transformer is not appropriate, as the land, as vacant land, is not affected by the nuisance factor of the installation. Therefore, for the 2016 taxation year, as of the legislated valuation date of January 1, 2012, the Board adjusts the current value assessment as returned from $520,000 to $298,054 as the correct current value for the 2016 taxation year.

27The Board notes the magnitude of reduction is considerable and merits clarification. It is the position of the Board that MPAC did not provide persuasive evidence to demonstrate similarity of the subject property to the five comparables used to support its returned value, in light of the significant disparity in lot area between the subject property. The Board noted that the appellant provided a persuasive position to consider an alternate method to factor into account the lot area variations and propose a defensible argument for a lower current value. As no other methods were put forth by either party and recognizing that both parties made their respective determinations based on the same comparable properties, the Board is satisfied with recommending a downward adjustment to the assessed current value as returned, to $298,054.

Equity Analysis

28Section 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.”

29For 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. Based on the downward adjustment of the subject property's CVA from $520,000 to $298,054, the Board determines no equity adjustment is required because Section 44(3)(b) of the Act only permits an equity adjustment if such an adjustment would result in a reduction of the current value. In this instance, the lowest assessment from any of the comparables is $541,000 which would require an increase of the subject's CVA, contrary to the Act.

Conclusion

30For the reasons set out above, the Board finds as follows:

a. The current value of the subject property, for the 2016 taxation year is reduced from $520,000 to $298,054, as of the January 1, 2012 valuation date.

b. The Board determines that no equity adjustment is required.