Gordon Reid Perrin v. Municipal Property Assessment Corporation, 2018 CanLII 118873

Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: December 06, 2018

FILE NO.: WR 154846

Assessed Person(s): Gordon Reid Perrin

Appellant(s): Gordon Reid Perrin

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 17

Respondent(s): Town of Huntsville

Property Location(s): 431 Beaver Meadow Road

Municipality(ies): Town of Huntsville

Roll Number(s): 4442-040-010-02300-0000

Appeal Number(s): 3267779 and 3309087

Taxation Year(s): 2017 and 2018

Hearing Event No.: 703269

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

Heard: August 3, 2018 in Huntsville, Ontario

APPEARANCES:

Parties	Representative
Reid Perrin	Self-represented
MPAC	Justin Johnstone
Town of Huntsville	No one appeared

DECISION OF THE BOARD DELIVERED BY LESLIE FLEMMING

BACKGROUND

1Gordon Reid Perrin (the “Appellant”) is the owner of 431 Beaver Meadow Road in the Town of Port Sydney (the “Subject Property”), which is comprised of 121.09 acres of vacant land, not on water, currently enrolled in the Managed Forests Program.

2Pursuant to the provisions of the Assessment Act (the “Act “), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, the MPAC is required to assess this value as of the January 1, 2016 valuation date.

3MPAC has assessed the value of the Subject Property, as of January 1, 2016, at $65,000, with 100% of the land in the Managed Forest property class. Consequently, the Board must determine the value of the Subject Property on January 1, 2016 for the 2017 to 2018 taxation years (“current value”).

4The Appellant has filed appeals for taxation years 2017 to 2018 with the Assessment Review Board (the “Board”), pursuant to s.40 of the Act. It is his position that MPAC’s assessment of current value is too high and that the correct current value is between $40,000 and $50,000.

5Pursuant to s. 40(11) of the Act, the Town of Huntsville is a party to this proceeding. However, the Town did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on the Town’s behalf.

6Section 44(3)(b) of the Act directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute of the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC takes the position that an equitable reduction is not required. The Appellant did not assert that an equitable reduction is required. Therefore, in this proceeding, this ground for appeal is not in issue.

7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value for the 2017 and 2018 tax years is $65,000. Pursuant to s. 44(3)(b) of the Act an equitable reduction of this value is not required.

Relevant Legislation and Rules

8Section 1 of Act states:

1. “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.

9Section 19.(1) of the Act states:

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

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.

10Section 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.

11Section 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.

Sections of the Act and Regulations relating to Managed Forests

12In accordance with s. 44.(3)(a) of the Act, the first mandate of the Board is to determine “the current value of the land.” The Subject Property is classified as Managed Forest Lands. The following legislation applies to the valuation of this property class for 2017 and subsequent years.

13Section 19.(5.2) states:

Conservation lands, managed forest.– The current value of land that is conservation land as defined in the regulations or land in the managed forests property class shall be based only on the current use of the land and not other uses to which the land could be put.

14Section 19.(5.2.1) states:

Current Value of Managed Forests.– Despite subsection (5.2) and any other provision of this Act, the Minister may, by regulation, provide that the current value of land in the managed forests property class shall be determined in accordance with the regulations.

15Section 32.1(1) of the Ontario Regulation O. Reg. 282/98 (the “Regulation”) states:

32.1 (1) The current value of land in the managed forests property class shall be determined as follows for the 2017 and subsequent taxation years:

1. Determine the value of the land in accordance with subsection 19 (5.2) of the Act.

2. Determine the value of the land in accordance with subsection (2).

3. If the value determined under paragraph 1 is less than the value determined under paragraph 2, the current value of the land is the value determined under paragraph 1.

4. If the value determined under paragraph 2 is less than 31 per cent of the value determined under paragraph 1, the current value of the land is the amount calculated by multiplying the value determined under paragraph 1 by 0.31.

5. In any other case, the current value of the land is the value determined under paragraph 2.

32.1(2) For the purposes of paragraph 2 of subsection (1), the value of the land is determined as follows:

1. Determine whether the geographic area in which the land is located is listed in Column 2 of Table 1 to Part IX.1 of this Regulation. If it is, take the step described in paragraph 2. If it is not, take the steps described in paragraphs 4 and 5.

2. If the geographic area is listed in Column 2 of Table 1, determine whether the land band for the land, as assigned by the assessment corporation, is listed in Column 3 of Table 1 for the applicable geographic area. If it is, take the steps described in paragraphs 3 and 5. If it is not, take the steps described in paragraphs 4 and 5.

3. For land located in a geographic area listed in Column 2 of Table 1 and assigned to a land band listed in Column 3 of Table 1, identify the applicable value per acre of the land as set out in Column 4 of Table 1.

4. For any other land, identify the applicable value per acre of the land as set out in Column 2 of Table 2 to Part IX.1 of this Regulation using the land band assigned to the land by the assessment corporation.

5. The value of the land is calculated by multiplying the applicable value per acre of the land by the acreage. O. Reg. 656/05, s. 1; O. Reg. 101/09, s. 1.

Issue

16The issue to be determined on this appeal is the correct current value of the Subject Property for the taxation years 2017 and 2018.

Discussion, Analysis and Findings

MPAC’S Evidence

17Justin Johnstone represented MPAC. Terri McLean, a Property Valuation Analyst with MPAC, gave the evidence for MPAC. She had prepared a Valuation Report dated March 20, 2018, and an Equity Analysis Report, both of which were accepted into evidence. She began by describing the Subject Property as a 121.09 acre parcel of forested land located on a seasonally-maintained road, without access to hydro. Ms. McLean estimates that the property is approximately 25% swampland, and the property received a 2% reduction in value for this feature. The entire parcel is enrolled in the Managed Forests Property Class.

18Ms. McLean stated that the initial valuation of the property was carried out using the direct sales comparison method, but that its value was reduced as a result of the application of the Regulation respecting the treatment of managed forests. She provided five comparable property sales in order to comply with s. 19(5.2) of the Act, which requires that the value of the land be based on its current use and not other uses to which it could be put. Ms. McLean testified that she had inspected the property and looked at aerial mapping of the entire parcel. She then compared the vacant land to the comparable property sales of similar lands in the area.

19Ms. McLean’s five comparable properties included one in the Managed Forests Program (254 Harp Lake Road) and four other vacant lands not in the program. These five properties were between 73 acres to 100 acres in size, and had sales values as set out in the following table:

TABLE OF COMPARABLE VACANT PROPERTY SALES

PROPERTY	SIZE (acres)	SALE PRICE	SALE DATE	ON-SITE VARIABLE	MF Program?
SUBJECT	121.09			25 – 50% swamp	Yes
264 HarpLake Road	97.39	$99,990	01/21/2015	Steep topography	Yes
204 Ena Drive	95	$95,000	04/24/2015	11 – 25% swamp	No
511 Yearly Road	73.96	$85,000	09/18/2015		No
2442 Etwell Road	100	$90,000	11/12/2015		No
196 Estonian Camp Road	99	$87,700	08/31/2016	11 – 25% swamp	No

20Ms. McLean’s opinion of the likely sale value for the Subject Property prior to the application of the Managed Forests calculation was $72,000. She testified that it was most like the property described as196 Estonian Camp Road in size and topography. This particular proposed comparable property is less than three kilometers from the Subject Property. The least comparable property in her opinion was 264 Harp Lake Road because of its steep topography.

21Ms. McLean then applied the Managed Forests calculation instructions contained in the Regulation. The Regulation requires that the current value be calculated in accordance with the steps set out in the Regulation. In this case, 121.09 acres is multiplied by the amount of $545 per acre, set in the Regulation, for a total of $65,994. MPAC rounded this value down to $65,000, which is the regulated value. Because the regulated value is less than the likely sale value (less than $72,000), the Regulation provides that the regulated value is the current value.

22In cross examination conducted by the Appellant, Ms. McLean confirmed that she had not inspected the entire parcel. When asked about a restrictive covenant on the land in relation to his deed and a right-of-way in favour of his neighbour, Ms. McLean replied that the restrictive covenant is not shown on the transfer deed (a copy of which was contained in her materials indicating the purchase of the property in 2006 by the Appellant) and would not affect the value of the land.

MPAC’s Submissions

23Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 to 2018 is $65,000.

Appellant’s Evidence

24The Appellant represented himself and testified on his own behalf.

25The Appellant did not enter documents into evidence. He had previously served documents on MPAC but did not send copies to the Board in advance of the hearing. The Board ruled against his entering documents at the hearing, finding that he had received adequate notice of the requirement that he provide documentary evidence to all parties and to the Board in advance of the hearing.

26The Appellant testified that he would agree with MPAC that the most comparable property was 196 Estonian Camp Road. However, it would be more valuable than the Subject Property due to the fact that it was severed by a road, making two parcels which would be easier to market should the owners wish to do so. The Appellant pointed out that the Estonian Camp Road property also had more road frontage than he did, a factor which adds value in his opinion.

27The Appellant also testified about the timber quality on his property, testifying that it is less valuable than some of the comparable properties. His land was logged in more recent years and not by Ministry of Natural Resources (as it then was) standards.

28The Appellant also objected to the percentage of swampland determined by MPAC. In his opinion, it is about 55 acres of wetland. He believes that MPAC failed to reduce apply a large enough reduction based on the presence of wetland, and suggested that the 51% to 75% reduction should have been applied.

Appellants’ Submissions

29Relying on his evidence, the Appellant submits that the correct current value for taxation years 2017 to 2018 is $40,000 to $50,000.

Findings on Current Value

30In dealing with a property registered in the Managed Forests Program, the Board is tasked with first determining the likely sale value of the land. The best indicator of the likely sale value would be the arm’s length sale of the Subject Property at or near to the valuation day, which in this case is January 1, 2016. Where a transfer has not taken place, then the best means of estimating value is to look for sales of similar properties as close as possible to the valuation day. Only after a finding of the likely sale value has been made do the subsequent rules respecting Managed Forest land come into play.

31MPAC presented five comparable vacant land parcels within the Town of Huntsville all with sales occurring in 2015 or 2016. The evidence disclosed, and the Board finds, that the five comparable properties were sufficiently comparable to the Subject Property to allow the estimate of current value of the Subject Property.

32The five properties ranged in size from 73 acres to 100 acres, all somewhat smaller than the Subject Property but all vacant, wooded parcels, not located on water. Their sales values ranged from $85,000 to $99,000. On a per acre basis, their sales values were:

• 264 Harp Lake Road: $1,026.70 per acre;
• 204 Ena Drive: $1,000 per acre;
• 511 Yearly Road: $1,149.27 per acre;
• 2442 Etwell Road: $900 per acre; and
• 196 Estonian Camp Road: $878.79 per acre.

33MPAC submits that the Subject Property is closest to the 196 Estonian Camp Road, but its location on a seasonal road and its percentage of wetland make it less valuable. MPAC recommends a likely sale value of $72,000. The Board accepts this as the likely sale value for this vacant parcel. The economies of scale would lead to a lower per-acre value than the proposed comparable sales because of the larger size of the parcel. The property’s less desirable locational and topographical factors would reduce the per-acre value still further. The recommended likely sale value works out to $594.60 per acre, which is likely what it would have sold for on the January 1, 2016 valuation day.

34The Appellant submitted that the deficits in his property would reduce the value still further. He argues that the parcel’s likely sale value should be in the neighbourhood of $40,000 to $50,000, but he did not provide any evidence to substantiate that valuation. Applying the Regulated value of $545 per acre to the Subject Property brings the value to $65,000. As this value is lower than the likely sale value ($72,000), it is the current value in accordance with paragraph 31.1(1)5 of the Regulation.

DECISION.

35The correct current value of the Subject Property is $65,000 for the 2017 and 2018 taxation years. The proper classification for the Subject Property is in the Managed Forests class.

36An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.