Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 19, 2017

FILE NO.: WR 148492

Assessed Person(s): V. K.

Appellant(s): Office of the Public Guardian and Trustee for V. K.

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

Respondent(s): City of Toronto

Property Location(s): (Address Withheld)

Municipality(ies): City of Toronto

Roll Number(s): (Roll Number Withheld)

Appeal Number(s): 3253322

Taxation Year(s): 2016

Hearing Event No.: 684893

Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A, as amended

Heard: September 12, 2017 in Toronto, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
V. K.	Crystal Liu
City of Toronto	Kitto Lau⁺ and Melanie Shankar

MEMORANDUM OF ORAL DECISION DELIVERED BY MARLENE CASHIN ON SEPTEMBER 12, 2017

INTRODUCTION

1This matter involves an application to the Assessment Review Board (“Board”) to cancel, reduce or refund, all or part of the taxes levied on the subject property identified above, for the taxation year 2016, pursuant to s. 323.(1)(e) of the City of Toronto Act, 2006 (“Act”).

2V. K., the applicant in this matter (“Applicant”), is represented by the Office of the Public Guardian and Trustee (“PGT”), which is the statutory guardian of the property of V. K. Crystal Liu, Articling Student for the Toronto office of the PGT, provided relevant medical and financial information, and made submissions on behalf of the Applicant.

3Kitto Lau, Counsel, appeared on behalf of the City of Toronto (“City”) to contest the application. Melanie Shankar, a Revenue Analyst with the City, appeared as a witness for the City.

ISSUE

4The issue before the Board was whether the Board should cancel, reduce or refund all or part of the taxes levied on the subject property for the taxation year 2016, because the Applicant was unable to pay taxes because of sickness or extreme poverty.

DECISION

5Based on all the evidence before it, the Board has not found that the Applicant was unable to pay his taxes due to sickness or extreme poverty as contemplated by the Act. Therefore, no refund of part or all of the taxes paid was granted.

ANALYSIS

6Section 323.(1)(e) of the Act states as follows:

323 (1) Upon application to the city treasurer made in accordance with this section, the City may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(e) the applicant is unable to pay taxes because of sickness or extreme poverty;

7The test under this section of the Act refers to whether the Applicant is unable to pay his/her property taxes due to “sickness” or “extreme poverty.” If either sickness or extreme poverty exists, the Applicant must then demonstrate an inability to pay some or all of the property taxes as a result of the sickness or extreme poverty.

Ability to Pay Taxes and Sickness

8The Applicant’s representative provided evidence that the Applicant’s illness started in the mid-1980s and that he has not worked since the mid-1990s. Medical records from his doctors confirm that he has chronic schizophrenia, and that he is not expected to be able to work again.

9The City agreed that sickness clearly exists in this case, and based on the reliable and persuasive evidence provided by the PGT, the Board found that the Applicant is indeed sick. Nevertheless, there was no evidence that the Applicant’s sickness resulted in an inability to pay his taxes. The Board then moved to an examination of the evidence relating to ability to pay taxes and “extreme poverty.”

Ability to Pay Taxes and Extreme Poverty

10The evidence before the Board on the Applicant’s monthly income of $1,188, was uncontested. Similarly, the Applicant’s approximate monthly expenses were agreed upon as follows:

• $103 – property taxes;
• $24 - home insurance;
• $414 - condo fees;
• $44 - cell phone and,
• $404 – groceries and other sundries,

for a total of $989.

11The Applicant’s total monthly income of $1,188, less his total monthly expenses of $989, resulted in a net total of $199 per month.

12The Applicant’s property taxes for the year 2016 were paid in full, in the amount of $1,235, by payments made throughout the year by the PGT.

13In considering the evidence regarding the Applicant’s assets, the Board was provided with information regarding two accounts. The first was a chequing account, into which the PGT deposits a weekly allowance, and from which the Applicant withdraws funds to pay for groceries and other sundry expenses throughout the month. Virtually no balance is carried in this account throughout the year. The Board did not include any amount from this account when tallying the Applicant’s assets.

14The second account, for the purposes of this Memorandum of Decision, will be referred to as a “trust account”, from which the PGT takes the funds to deposit the weekly allowance into the chequing account for the Applicant. The trust account is managed by the PGT, and is used to deposit the Applicant’s monthly Ontario Disability Support payments, and to pay all of the other expenses of the Applicant, such as condo fees, home insurance, telephone, and property taxes. It had a balance of $3,706.55 at the end of December 2016.

15The City urged the Board to use the closing balance amount when accounting for assets held in the trust account for 2016. However, the Applicant’s representative argued that using the closing balance amount would be incorrect, because the account is not like a savings account where money is simply accrued, but acts instead like a very active chequing account, where the balance can vary widely throughout any given month, as bills are paid. The Board notes that although the balance has varied throughout the year, the balance carried from month to month appears generally to have been increasing. For example, the balance on November 1, 2016 was $3,166.83, and on November 30, 2016 was $3,480.36. On December 1, 2016 the account balance was $3,459.75, and on December 30, 2016 was $3,706.55. The transactions for the months of November and December 2016 appear to be representative of the transactions that have taken place in the other months of the year, with no unusual deposits or withdrawals having occurred. The Board was satisfied that using the December 30, 2016 balance amount of $3,706 for the assets in the trust account, was appropriate.

16The only other asset owned by the Applicant is a condo property (taxes for which, are the subject of this application). The subject property is a one-bedroom, one-bathroom condo. There is no mortgage on the property.

17The parties disagreed on the appropriate amount to use when assessing the value of the subject property for the purposes of an application for extreme poverty. The City noted that the Board generally uses the assessed value of a property for applications of this kind, and that in this case, the assessed value was $180,000 for 2016. The City submitted evidence regarding a comparably sized condo in the same building as the subject property, which sold for $265,000 in September 2016. The City also provided a report prepared for the PGT by TransferEASE, regarding the subject property, dated February 1, 2016. In that report the “Range of Value” and “Suggested Listing Price” were both set at “from $169,000 to $184,900.”

18The Applicant’s representative argued that the property was worth less than $180,000, and should probably be closer to $150,000 because of the condition of the property as compared to other properties in the condo building, but did not provide any other evidence to support an estimate of $150,000.

19The Board, having considered the evidence and submissions of the parties, found that the assessed value of $180,000 was an appropriate amount for a consideration of assets of the Applicant, in this situation, given that there was no reliable evidence provided by the Applicant which would cause the Board to depart from its usual practice of using the assessed value.

20Having found that the Applicant’s assets totaled approximately $183,706 (trust account of $3,706, and condo assessed at $180,000) the Board found that the Applicant had the resources to pay for his 2016 property taxes, by either using the money in the trust account (which the PGT did use to pay the property taxes on his behalf), or by leveraging the equity in his home.

CONCLUSION

21The Board concluded that “sickness” does exist in this situation, but that the sickness did not cause the Applicant the inability to pay his taxes for 2016. Further, the evidence did not support a finding that “extreme poverty” caused the Applicant an inability to pay his taxes.

22In conclusion, the Board declined to make an order cancelling, reducing or refunding the Applicant’s property taxes for the year 2016. The application was dismissed.