Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 17, 2017 FILE NO.: WR 148442

Assessed Person: Christina Vivani Appellant: Christina Vivani Respondent: Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent: City of Toronto

Property Location: 315 Springdale Blvd. Municipality: City of Toronto Roll Number: 1906-022-370-01000-0000 Appeal Number: 3216868 Taxation Year: 2016 Hearing Event No.: 684889

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

Heard: August 30, 2017 in Toronto

APPEARANCES:

Parties	Representative
Christina Vivani	Leonard Subotich
MPAC	Damian Bernacik
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY SCOTT McANSH and TYRONE SKANES

1315 Springdale Blvd. (the “Property”) was assessed at $456,000 for the 2016 taxation year. Leonard Subotich appealed that assessment on the basis that MPAC had failed to conduct an appraisal before returning the assessment to the municipality. He did not provide any legal requirement that an appraisal be conducted, nor did he provide any explanation as to what the meaningful differences are between an appraisal and an assessment. He also urged us to dismiss any evidence provided by MPAC because, in his opinion, it lacks any credibility due to errors and omissions in its report.

2We find no merit in any of Mr. Subotich’s arguments. The evidence indicates that the Property has a current value of approximately $490,000 and that it would not be inequitable to assess the Property at its current value. However, MPAC did not seek a higher assessment. We therefore confirm the assessment of the Property at $456,000 for the 2016 taxation year.

Legislation

3Section 44.(3)(a) of the Assessment Act (“Act”) requires us to “determine the current value of the land.” Current value is defined in s. 1 as “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.” That is, we must determine what the subject property would have sold for in an arm’s length transaction on the relevant valuation day set, pursuant to s. 19.3 of the Act, as January 1, 2012 for the 2016 taxation year.

4Once we have determined the current value, s. 44.(3)(b) requires that we “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” but only if that adjustment would result in a reduction of the assessment.

Issues

5The Property is a two-storey detached home in eastern Toronto. The home was built in 1920 and sits on a narrow, 20 foot wide lot. The home has a total square footage of 1,102, and an unfinished basement. The site also has a parking pad. Mr. Subotich did not dispute the information presented by MPAC about the Property, or any of the comparable properties they presented. Mr. Subotich also did not present any sales evidence or suggest a value at which the Property ought to be assessed.

6Mr. Subotich focused his submissions on the manner in which MPAC returned the assessment. He argued that an appraisal must precede any assessment and, because MPAC had not prepared an appraisal, there could not be a valid assessment. He also raised methodological concerns with MPAC’s report.

Current Value and Equity

7Our first task is to determine the current value of the property, or what it likely would have sold for on January 1, 2012. The best evidence of the current value of a residential property is the sale of that property on or near the valuation date. Where that evidence is unavailable, the sales of similar properties on or near the valuation date are the next best evidence of value. MPAC presented five properties that had sold within a year of the January 1, 2012 valuation day. Mr. Subotich did not provide any sales evidence. The relevant characteristics of the sales provided by MPAC are set out in the table below:

	Address	House (sq. ft.)	Lot (sq. ft.)	Year Built	Parking	Sale Date	Sale Price
	315 Springdale Blvd.	1,102	1,981	1920	Pad
A	335 Springdale Blvd.	1,168	1,704	1923	No	Oct. 2011	$444,900
B	349 Queensdale Ave.	1,064	2,200	1925	Pad	May 2012	$551,000
C	154 Woodmount Ave.	1,238	2,000	1920	No	May 2012	$495,000
D	130 Glebemount Ave.	1,122	2,000	1918	Pad	Feb. 2011	$490,000
E	12 Binswood Ave.	1,130	3,435	1945	Garage	Jan 2012	$535,000

8We agree with MPAC that these sales support at least the $456,000 assessment. All of the properties presented by MPAC are very comparable to the Property. They are similar in size and age and are located in the same area. Sale E is the most dissimilar from the Property, having a much larger lot, newer construction, and a garage. The remaining sales show that properties like the Property were selling for between $444,900 and $551,000 near the valuation day. The two properties with parking pads, like the Property, have a range of $490,000 to $551,000. Sale D is the most similar property and indicates that the current value of the Property is likely close to $490,000.

9We did not hear any evidence to indicate that there would be any inequity in assessing the Property at its current value. As such, we do not find that any adjustment is required pursuant to s. 44(3)(b).

10We therefore find that the evidence supports the returned assessment of $456,000. While the evidence indicates a slightly higher current value, MPAC did not seek a higher assessment, as required by the Board’s Rules of Practice and Procedure.

Appraisal

11The main argument put forward by Mr. Subotich was that an appraisal must be prepared before an assessment can be returned to the roll. That argument was rejected by Member Wyger in Viviani v. Municipal Property Assessment Corp., Region No 9 and 15, [2012] O.A.R.B.D. No. 253. We would also reject that argument.

12The word “appraisal” does not appear in the Act. The only reference to having anything appraised is in s. 30(2), which only applies to railway lands. Mr. Subotich did not point us to any other legal authority that might require an appraisal before the assessment of land in Ontario.

13Appraisal and assessment are functionally equivalent. The Merriam-Webster Dictionary defines “appraise” as “to set a value on.” That same dictionary defines “assess” as “to make an official valuation of (property) for the purposes of taxation” and lists “appraise” as the second synonym of “assess.” That is, an assessment is effectively an appraisal for tax purposes. Mr. Subotich’s argument that property must be appraised by MPAC before it is assessed is an argument that MPAC must value the land twice. If the legislature had intended to place such an onerous burden on MPAC, it would have done so explicitly.

14It appears that Mr. Subotich’s main concern with assessment is that MPAC does not inspect every property, or take enough care in determining each residential property assessment. Instead, MPAC relies on a statistical method, multiple regression analysis, to calculate a value for each residential parcel. There is nothing illegal about that practice. This Board is a check on MPAC’s assessments. If the assessment is challenged, MPAC must use specific market evidence to defend the value before the Board. As stated by Member Wyger in Viviani, supra at paragraph 6 “when an assessor comes to a hearing, in many ways he/she has done an individual appraisal.” They have done that here. There is no error in how MPAC returned the assessment because there is no requirement that they first conduct an appraisal.

MPAC Evidence

15Mr. Subotich’s other argument was that MPAC’s evidence was not credible because of an alleged error in its report and its failure to depreciate the Property.

16MPAC provided a price change over time report to calculate a time adjustment factor. We have not relied on that report because the sales took place relatively close to the valuation day. However, Mr. Subotich was concerned that MPAC had calculated the time adjustment factors using a sale to assessment ratio. He correctly noted that the usual way to present the relationship between sales and assessments is as an assessment to sales ratio, to demonstrate the level of assessment for equity purposes. In an equity study, the variable of interest is the assessment. This is because the question in an equity context is how well assessments track sales. This is a different purpose from price change over time.

17Price change over time is not attempting to show the level of assessment. Instead, the report is attempting to show how sales values change over time. A price change report uses the relationship between sales and assessments over time, to see if sales values are changing. Both time and the assessment are known, the change in sales is what is of interest. For that reason, sales are the top of the ratio in a price change chart.

18Mr. Subotich seemed to assume that the relationship between sales and assessments should be expressed in one ratio in all contexts: the assessment to sales ratio. That is not the case. We find no merit in his complaint about the price change over time report using a sales to assessment ratio.

19Mr. Subotich’s final complaint about MPAC’s evidence was that it did not depreciate the assets on the Property. He argued that his air conditioner cannot be worth more now than when it was purchased. That is true, and if MPAC had approached value using the cost approach, it would have likely taken that depreciation into account. But a direct sales comparison approach does not look at the value of each component of a property. Instead it looks at what properties like it sold for, and lists the differences between the properties. The sales comparison method relies on many sales of similar property to provide a range of values for the property at issue. Depreciation is not a part of the methodology presented by MPAC.

20We find no merit in the arguments put forward by Mr. Subotich.

CONCLUSION

21The evidence indicates that the Property has a current value of $490,000. There is no evidence that it would be inequitable to assess the Property at its current value. However, MPAC is not seeking to increase the assessment, so we confirm the assessment of 315 Springdale Blvd. at $456,000 for the 2016 taxation year.