Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 26, 2018

FILE NO.: WR 156842

Assessed Person(s): Mary Granic

Appellant(s): Mary Granic

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

Respondent(s): City of Toronto

Property Location(s): 33 Charleston Road

Municipality(ies): City of Toronto

Roll Number(s): 1919-032-220-00100-0000

Appeal Number(s): 3195366 and 3294453

Taxation Year(s): 2017 and 2018

Hearing Event No.: 707173 and 708566

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

Heard: November 02 and 06, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Mary Granic	Mary Granic and Tanya Allen
MPAC	Maria Cheung
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

BACKGROUND

1Mary Granic (the “Appellant”) is the owner of a single storey detached family home located at 33 Charleston Road (the “Subject Property”) in the City of Toronto. It is situated on a 0.13 acres (ac.) corner lot with 40 feet (ft.) of effective frontage. It has 1,458 sq. ft. of total building area and a finished basement area of 1,220 sq. ft. It was built in 1953 and underwent renovation over a number of years including a “C” renovation in 2011 that also added 277 sq. ft. for an effective year of build of 2003. MPAC has assigned it a quality class rating of 6. There is also an attached garage.

2MPAC returned the assessment for the Subject Property at $886,000 for the 2017 and 2018 taxation years.

3Ms. Granic appealed the assessment for the 2017 and 2018 taxation years to the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act (“Act”). She was assisted at the hearing by her daughter, Tanya Allen, who also provided evidence and submissions. It is their position that the Subject Property is assessed too high. She estimates the Subject Property’s current value is $800,000.

4Pursuant to the Act, the burden of proof as to the correctness of the current value of the Subject Property rests with MPAC. For the period of 2017-2020, the Subject Property is valued as of January 1, 2016. MPAC’s representative, Maria Cheung’s opinion of current value is $983,000 based on the direct comparison approach.

5Ms. Cheung also conducted an equity study and determined that an equity adjustment is required. It is her position that the current value should be reduced from $983,000 to $895,000. She concludes that the assessment should be confirmed at $886,000 for the 2017 and 2018 taxation years.

6Ms. Granic agrees that the Subject Property is inequitably assessed in relation to similar properties and should be assessed around $800,000.

ISSUES

7The issues to be determined on this appeal are:

a) What is the correct current value of the Subject Property as of the January 1, 2016 valuation date;

b) Whether there should be an equitable reduction of the current value as determined by the Board and, if so, what should the amount of this reduction be.

DECISION

8The Board finds that the current value of the Subject Property, as of the January 1, 2016 valuation date is $917,000. Furthermore, the Board finds that the evidence before it supports the conclusion that an equitable adjustment is required under s. 44.(3)(b )of the Act. An equitable assessment is $835,000.

9Therefore, the assessment of the property located at 33 Charleston Road is reduced from $886,000 to $835,000 for the 2017 and 2018 taxation years.

RELEVANT LEGISLATION

10Section 1 of the Act states:

“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.

11Section 19.1(1) of the Act states:

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

12Section 19.2(1) of the Act states:

Valuation days

19.2 (1) 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 the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

13Section 40.(17) of the Act states:

40.(17) 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.

14Section 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.

Analysis and Findings

What is the correct current value of the property as of the January 1, 2016 valuation date?

MPAC’s Evidence and Submissions

15Ms. Cheung relies on a “Valuation Report” of the Subject Property. She states that she inspected the property on March 17, 2017.

16The key property details for the three proposed comparable properties with sales presented by MPAC are set out below in Table A. All sales have been time adjusted to the legislated valuation date.

Table A

Property	Site Area (ac./sq.ft.) (effective)	Frontage (ft.) (effective)	Year Built (effective)	Building Area (sq. ft.)	Other	Sale (Time Adjusted Sale “TAS”)	2016 Current Value Assessment (CVA)
33 Charleston Road (Subject Property)	0.13 /5,630	40	1953 (2003)	1,458	-Corner lot (- 2%) -1 storey “C” reno (2011) -277 sq. ft. added in 2011 -Finished basement area:1,220 sq. ft. -Attached 2 car garage
12 Charleston Road (Sale 1)	0.13	40	1954 (2011)	1,575	-1 storey “D” reno (2014) -425 sq. ft. added in 2014 -Finished basement area: 1,000 sq. ft. -1 car detached garage (2012)	1,203,500 (1,050,893) (11/18/2016)	924,000
72 Smithwood Drive (Sale 2)	0.13	54	1961	1,329	-2 car basement garage -Finished basement area: 375 sq. ft.	835,000 (961,301) (03/27/2015)	746,000
3967 Bloor Street West (Sale 3)	0.13	35	1957 (2005)	1,487	-Heavy traffic (-10%) -“C” reno (2014) -Finished basement area: 660 sq. ft. -1 car attached garage	806,000 ($958,435) (01/15/2015)	793,000

17Ms. Cheung states that Sale 1 is located on the same street as the Subject Property and has also undergone an addition and renovation. The total site area is the same and the total building area is 117 sq. ft. larger. It has a single car detached garage. She asserts that it is relatively comparable to the Subject Property. It has a TAS of $1,050,893 and the Subject Property’s current value should be similar.

18Ms. Cheung states that Sale 2 was built in 1953 and sold in its original condition for a TAS of $961,301. The total site area is the same and the total building area is 129 sq. ft. smaller. She asserts that it is inferior to the Subject Property and the Subject Property’s current value should be higher.

19Ms. Cheung states that Sale 3 has also undergone a renovation. The total site area is the same and the total building area is 29 sq. ft. larger. It has a single car attached garage. It is located on Bloor Street and receives a negative 10% heavy traffic adjustment. She asserts that it is relatively comparable to the Subject Property other than the heavy traffic. It has a TAS of $958,435 and the Subject Property’s current value should be higher given that is abuts heavy traffic.

20Ms. Cheung states that the TAS per sq. ft. for Sale 1 is $667.23. She adds that she adjusted Sale 3’s TAS by $95,843.50 for an adjusted TAS of $1,054,278 to adjust for the 10% heavy traffic adjustment for an adjusted TAS per sq. ft. of $709.00. The average TAS is $688.11. She states that she then applied the average TAS per sq. ft. of $688.11 to the Subject Property’s total building area of 1,458 sq. ft. for a resulting value of $1,003,264. She then applied a negative 2% adjustment for the Subject Property’s corner lot location for a value of $983,199. Her opinion of current value is $983,199 or $983,000 (rounded).

Appellant’s Evidence and Submissions

21Ms. Granic states that the Subject Property was purchased in 2007 for under $500,000 as “a fixer upper”. Renovations have been carried out over time and included wrapping the house in stucco, updating the kitchen, increasing the building’s footprint, adding walls, refinishing basement floors, and completing a basement bathroom in January 2016. Some parts of the house still have old wiring as not all of the house was renovated.

22Ms. Allen also highlighted what she asserts is a pattern of incorrect information as MPAC believed for many years that the dwelling had been demolished in 2011 and a new dwelling built.

23Ms. Granic and Ms. Allen are of the opinion that the assessment as returned for $886,000 is too high and estimate the Subject Property’s current value as $800,000.

24Ms. Allen refers to two proposed comparable properties located at 26 Bloorlea Crescent and 80 Mervyn Avenue.

25The Board asked Ms. Cheung to provide or confirm key property details as set out below in Table B. Ms. Allen states that the 2016 assessment for 26 Bloorlea Crescent is listed on MPAC’s website as $789,000. Ms. Cheung states that while the market picked up the kitchen and bathroom renovations, the assessment as returned at $789,000 did not. The assessment for 26 Bloorlea Crescent was corrected at $845,000.

Table B

Property	Site Area (ac./sq.ft.) (effective)	Frontage (ft.) (effective)	Year Built (effective)	Building Area (sq. ft.)	Other	Sale (Time Adjusted Sale “TAS”)	2016 CVA
33 Charleston Road (Subject Property)	0.13 /5,630	40	1953 (2003)	1,458	-Corner lot (-2%) -“C” reno (2011) -277 sq. ft. added in 2011 -Finished basement area:1,220 sq. ft. -Attached 2 car garage
26 Bloorlea Crescent (Property 1)	5,748	45	1963 (1996)	1,349	-Renovated -“B” reno (2015) -Finished basement area: 1,000 sq. ft. -11/2 car attached garage	790,000 (774,200) (02/26/2016)	789,000/845,000
88 Mervyn Avenue (Property 2)	6,646.78	52.79	1954	1,414	-Finished basement area:468 sq. ft. -1 car attached garage	785,000

26Ms. Granic asserts that 26 Bloorlea Crescent is in a similar renovated condition to the Subject Property. She considers it as similar and perhaps a bit superior to the Subject Property. However, it has more bedrooms (four bedrooms as compared to the Subject Property’s three bedrooms), more bathrooms (three bathrooms as compared to the Subject Property’s two bathrooms) and an additional kitchen in a basement apartment. She asserts that it is located on a nearby but calmer street and in a similar neighbourhood as the Subject Property.

27Mr. Granic states that Property 2 has a corner lot location like the Subject Property. The total building area is only 44 sq. ft. smaller. However, it has a larger building lot.

28Ms. Allen asserts that MPAC’s Sale 1, 12 Charleston Road, should not be considered as the sale took place after the January 1, 2016 valuation date when the market had increased.

29Ms. Allen considers MPAC’s Sale 2, 72 Smithwood Drive, as a reasonable comparable. However, she notes that it is located in a better area and on a better street. Unlike the Subject Property, it does not have any speed bumps.

30Ms. Allen also considers MPAC’s Sale 3, 3967 Bloor Street West, as relatively comparable. She asserts that while it receives a traffic adjustment, it is not a busy as one might expect.

31Ms. Granic also noted that the sidewalk in front of the Subject Property stops abruptly and that people cut through the property.

32Mr. Granic is of the opinion that based on the age and condition of the Subject Property, a current value of $800,000 is more accurate.

Board’s Analysis and Findings

33Under s. 44.(3)(a) of the Act, the Board must first determine “the current value of the land.” The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation date or close to it.

34The Board has four comparable sales to consider in determining the Subject Property’s current value.

35The Board finds the property located at 72 Smithwood Drive to be inferior to the Subject Property. It has a similar site area but 129 sq. ft. less total building area than the Subject Property. It was originally built in 1961 and had not undergone any renovation prior to its sale in 2015.

36The Board finds the property located at 12 Charleston Road to be superior to the Subject property. It is located on the same street as the Subject Property and has a similar site area. The dwelling has an additional 117 sq. ft. in total building area. However, it has undergone a more recent and more extensive “D” renovation than the Subject Property and has an effective year of build of 2011. It also has a newer detached garage that was built in 2012.

37The Board finds the properties located at 3967 Bloor Street West and 26 Bloorlea Crescent to be reasonably comparable to the Subject Property and the best evidence of current value before the Board.

38The property at 3967 Bloor Street West has the same total site area and a total building area that is 29 sq. ft. larger. It has also undergone a recent “‘C” renovation like the Subject Property but has a slightly higher effective year of build of 2005. Unlike the Subject Property, it receives a negative 10% heavy traffic adjustment due to its location on Bloor Street West.

39The property at 26 Bloorlea Crescent has a site area that is 118 sq. ft. larger and a total building area that is 109 sq. ft. smaller than that of the Subject Property. It has undergone a more recent, but less substantive, “B” renovation and has a slightly lower effective year of build of 1996.

40The TAS for 3967 Bloor Street West is $958,435. Adjusting the TAS for the 10% heavy traffic adjustment ($95,843.50) and for the 2% corner lot location ($19,168.70) results in an adjusted TAS of $1,035,109.80 ($958,435 plus $95,843.50 minus $19,168.70). The TAS per sq. ft. is $696 ($1,035,109 divided by 1,487 sq. ft.).

41The TAS for 26 Bloorlea Crescent is $774,200. Adjusting the TAS for the 2% corner lot location ($15,484) results in an adjusted TAS of $758,716 ($774,200 minus $15,484). The TAS per sq. ft. is $562 ($758,716 divided by 1,349 sq. ft.).

42Applying the average TAS per sq. ft. of $629 to the Subject Property’s total building area of 1,458 sq. ft. results in a value of $917,082.

43The Board finds the current value of the Subject Property as of the January 1, 2016 valuation date to be $917,000 (rounded).

Whether there should be an equitable reduction of the current value pursuant to s. 44.(3)(b) of the Act, and, if so, what should the amount of this reduction be?

MPAC’s Evidence and Submissions

44Ms. Cheung relies on an “Equity Analysis Report” that considers the time adjusted sales of 30 single family detached properties that occurred between January 1, 2015 and December 31, 2016 located within 0.42 kilometres of the Subject Property.

45In her Report, Ms. Cheung states that the level of appraisal is established by determining the median Assessment to Sale Ratio (ASR) in the sales sample. For purposes of the equity test, MPAC takes the position that equity is achieved if the median ASR falls between 0.95 and 1.05. In this case, the median ASR is 0.911 and is outside the target level of appraisal.

46Ms. Cheung asserts that based on her analysis, similar properties in the vicinity have not been assessed at or near their current values and that an equity adjustment is required. Applying the median ASR of 0.911 to MPAC’s suggested value of $983,000 results in an equitable value of $895,000.

47Ms. Cheung concludes that the equitable value of $895,000 is higher than the assessment as returned of $886,000. MPAC has not provided notice that it is seeking a

higher assessment. She concludes that the assessment should be confirmed at $886,000 for the 2017 and 2018 taxation years.

Appellant’s Evidence and Submissions

48Ms. Granic agrees that the Subject Property is inequitably assessed in relation to similar properties and should be assessed around $800,000.

Board’s Analysis and Findings

49Section 44.(3)(b) of the Act directs that after determining current value, 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 the land.”

50The purpose of equitable adjustment has been described as the equitable distribution of the tax burden according to the assessed value of property owned by taxpayers as follows by the Ontario Court of Appeal in Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) at page 2:

A prime objective of municipal taxation is the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.

51In addressing equity in assessment, the Court, at page 6, also noted that:

an assessment made at the actual value of lands and buildings … would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred [emphasis added].

52The term “vicinity” is not defined in the Act, but refers to the appropriate geographical area that will yield a meaningful number of comparables (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 16 O.R. (3d) 83, 1993 CanLII 8621 (Ont. C.A.) at page 6).

53The test set out in s. 44.(3)(b) of the Act, requires that the Board refer to similar lands in the vicinity. Use as a point of similarity, may be, but is not necessarily determinative of similarity. In determining whether other lands are similar, the Ontario Divisional Court, in Municipal Property Assessment Corp. v. Loblaw Properties Ltd., 20172 ONSC 1299, applied the decision of the Ontario Divisional Court in Trizec Equities Ltd. v. Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182, . The Court stated at paragraph 23:

…All points of comparison must be considered. The Board must make a factual finding based on such a consideration. One point of similarity such as use may be, but is not necessarily, determinative. Some similarities may be overridden by other characteristics and some differences may be subordinated.

54The ASR analysis of a reasonable sample of sold properties is one method used to determine if properties in the vicinity are assessed below their current value. If other properties are assessed substantially below their current value, then a reduction is required to make the assessment of the Subject Property equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the sale price.

55Ms. Cheung relies on an Equity Analysis Report that considers the time adjusted sales of 30 properties located within .45 kilometres of the Subject Property. In this case, the median ASR of 0.911 falls outside the acceptable range and supports and equitable adjustment. Ms. Granic agrees that the Subject Property is inequitably assessed in relation to similar properties.

56The Board finds that evidence supports the conclusion that an equitable adjustment is required. Applying the median ASR of 0.911 to the current value of $917,000 results in an equitable value of $835,000. An equitable assessment is therefore $835,000

CONCLUSION

57The Board finds that the current value of the Subject Property, as of the January 1, 2016 valuation date is $917,000. Furthermore, the Board finds that the evidence before it supports the conclusion that an equitable adjustment is required under

s. 44. (3)(b ) of the Act. An equitable assessment is $835,000.

58Therefore, the assessment of the property located at 33 Charleston Road is reduced from $886,000 to $835,000 for the 2017 and 2018 taxation years.