Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 11, 2018

FILE NO.: WR 156743

Assessed Person(s): Devinder Brar

Appellant(s): Devinder Brar

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): Town of Oakville

Property Location(s): 450 Winston Churchill Boulevard

Municipality(ies): Town of Oakville

Roll Number(s): 2401-040-210-15200-0000

Appeal Number(s): 3265060 and 3304264

Taxation Year(s): 2017 and 2018

Hearing Event No.: 706468

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

Heard: October 12, 2018 in Oakville, Ontario

APPEARANCES:

Parties	Counsel+ / Representative
Devinder Brar	Robert Baranowski
MPAC	Michael Nitsos+ and Terence Johnston
Town of Oakville	Susan Price

DECISION OF THE BOARD DELIVERED BY VINCENT STABILE

INTRODUCTION

1The subject property is a two-storey detached residential dwelling built in 1940 with a building area of 2,976 square feet. It was renovated in 1985 resulting in an effective year built of 1978. The quality of construction is 6. It has an attached garage of 720 square feet and a detached garage of 456 square feet. It is situated on a lot of 1.02 acres in size, according to MPAC.

Background

2For the January 1, 2016 valuation date, MPAC returned the assessment at $1,144,000. MPAC had requested permission to inspect the property but was refused. MPAC did not bring a motion to deal with the issue.

3The subject property has two adjustments. One for Medium Traffic Pattern and another for Abuts Industrial. At the hearing, MPAC requested a change from Abuts Industrial to Abuts Green Space.

4The appellant agrees with the approach to value and the valuation date of January 1, 2016, but challenges all other submissions and requests from MPAC.

ISSUE

5The issue to be determined is the correct current value of the property as of January 1, 2016.

DECISION

6I determine that the correct current value for the 2017 and 2018 taxation years was $1,137,000. I further determine that an adjustment for equity was warranted thereby reducing the value for the 2017 and 2018 taxation years to $1,069,000 (rounded).

EVIDENCE

MPAC

7The assessor, Terence Johnston, filed a Valuation Report proposing a current value of $1,291,000 as of January 1, 2016 using the direct comparison approach. He proposed the sales of four comparable properties, all described as slightly inferior, with a range of values, time adjusted, of $937,543 to $1,391,683. All four properties were located in the same homogeneous neighbourhood and all were two-storey single family detached properties. All of the comparable properties were noted with Abuts Green Space code.

8He testified that Abuts Industrial results in a negative adjustment of -5%. Whereas Abuts Green Space results in a positive adjustment of +4%.

9For purposes of time adjustment, Mr. Johnston relied upon a study of 147 sales in the vicinity from January 29, 2015 to December 15, 2016, a period of 23 months. He concluded from that study that the overall market had increased by 47.83% over that time frame.

10The assessor stated that all other properties on Winston Churchill, in close proximity to the subject property, at one time had ‘Abuts Industrial’ but had been removed and replaced with ‘Abuts Green Space.’ The subject property was omitted from the change for unknown reasons.

11For this reason the assessor proposed to change the Abuts Code for the subject property to ‘Abuts Green Space.’

12He stated that the most comparable of the four proposed comparable properties were #1 and #3, with time adjusted sales of $1,391,683 and $1,191,551. The average of those two sales was $1,292,617. Thus, he stated that his estimated current value for the subject property was $1,291,000 (rounded down).

13Mr. Johnston had prepared and filed an Equity Analysis Report (Exhibit #2) as a result of which he determined that his estimate of current value warranted an adjustment of 6%, thereby reducing the current value to $1,214,000.

14The assessment, as returned, was $1,144,000 being lower than the $1,214,000.

Municipality

15Susan Price testified for the Municipality. She had filed valuation documents (Exhibit #6) proposing two additional comparable properties. However, at the outset of her testimony, she requested that I disregard comparable #2. The remaining proposed comparable, after making some adjustments for ‘Abuts Green Space’ resulted in a time adjusted sale of $1,054,000. She readily acknowledged that this value was less than the value proposed by the assessor. Therefore she stated that she would support the opinion of the assessor.

Cross-Examination

16During cross-examination by Mr. Baranowski, the assessor acknowledged that in correspondence from MPAC (Exhibit #4) following the Request for Reconsideration and the subsequent Property Assessment Notice (Exhibit #5), MPAC consistently stated that $1,144,000 was the correct assessed value.

17It also became apparent that MPAC was not aware that the subject property was flanked on one side by a house used as a Hospice (Ian Anderson House) and by a farm that was used as a ‘truck parking area.’ Both were noted in Exhibit. #1(a). No adjustments had been made relating to those two matters. However, no evidence was received as to the value that ought to be attributed to those factors.

18The assessor also conceded that no specific adjustments had been made for the various differences in attributes between the subject property and any of the comparable properties relied on.

19At the end of his cross-examination, Mr. Baranowski submitted that MPAC had failed to meet its burden of proof under the Assessment Act (“Act”) and requested that I invoke the provisions of s. 40.(17) and thereafter follow the principle set out in Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) WR 152892 by fixing the assessment at the last uncontested assessed value (see paragraph 40). In this case the 2012 assessment is $858,000.

20In the alternative, Mr. Baranowski requested that I reduce the assessed value of $1,144,000 by 6% for equity, based on the study filed by the assessor and accepted by Mr. Baranowski.

APPELLANT

21Mr. Baranowski filed no valuation documents, other than the correspondence from MPAC and the Assessment Notice presented to MPAC is cross-examination. Further, he gave no testimony on behalf of the appellant.

LEGISLATION

22Section 44.(3)(a) of the Act requires this Assessment Review Board (“Board”) 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, the Board 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, in this case January 1, 2016 for the 2017 and 2018 taxation years.

23Subsection 40.(17) of the Act states: “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.”

24Once the current value has been determined, s. 44.(3)(b) requires that the Board “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.

ANALYSIS

25The assessor and the Municipality proposed, in total, five comparable properties, both using the Direct Comparison Approach, commonly used for residential properties. The assessor limited his comparable properties to #1 and #3 used the bracketing method to arrive at a current value of $1,291.000 (rounded down) and then applied a six per cent reduction (6%) for equity.

26As to the request from the assessor to change the ‘Abuts’ code to ‘Abuts Green Space’, the Board is not constructing an assessment from a multiple regression analysis. Metrics, such as the impact of abutting uses, cannot be gleaned from the sales submitted. The Board is required to determine the value of the land, not the correct parameters in MPAC’s database. I therefore put no weight on the percentage adjustments assigned to the property by MPAC. It follows that I do not change the code.

27I believe I have sufficient evidence, both from the assessor and the Municipality, to determine current value. I prefer, however, to use all of the comparable properties relied upon, four from the assessor and one from the Municipality.

28Using those time adjusted sales figures I arrive at an average of $1,136,621. I have considered characteristics such as location, land, area, improvements, size, relative quality, and age between the proposed comparable properties and the subject property. I am satisfied that the degree of similarity between the proposed comparable properties and the subject property is sufficient to determine current value.

29I therefore find that the correct current value for the subject property is $1,137,000 (rounded).

30On the evidence before me, I believe MPAC has discharged its burden of proof. I therefore refuse to invoke the provisions of s. 40.(17) of the Act.

EQUITY

31The only evidence received on this issue is from the assessor: He filed Equity Analysis Report (Exhibit #2) comprising an Assessment to Sales Ratio (“ASR”) study of 30 properties resulting in a median ASR of 0.941 and an average ASR of 0.938.

32The assessor stated that equity is achieved if the median ASR falls between 0.95 – 1.05.

33The assessor conceded that, based on his own study, a six (6%) reduction in current value was required pursuant to s. 44.(3)(b) of the Act. Mr. Baranowski also agreed.

34Although I prefer to consider the mean (average) ASR, the result in this case is nearly the same. I agree that a six (6%) reduction is warranted. Accordingly the current value of $1,137,000 is hereby reduced by $68,220 (6%) resulting in an equitable assessment of $1,068,780 ($1,069,000 rounded).

CONCLUSION

35I have determined that the correct current value for the 2017 and 2018 taxation years is $1,137,000 (rounded). Further, that a reduction for equity is warranted resulting in an equitable assessment for the 2017 and 2018 taxation years of $1,069,000 (rounded).