Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 24, 2018

FILE NO.: WR 153242

Assessed Person(s): Anjali Anand

Appellant(s): Arun Anand

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

Respondent(s): Town of Oakville

Property Location(s): 2447 Valley Forest Way

Municipality(ies): Town of Oakville

Roll Number(s): 2401-010-030-89398-0000

Appeal Number(s): 3253155 and 3307190

Taxation Year(s): 2017 and 2018

Hearing Event No.: 697285

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

Heard: May 3, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Arun Anand, Anjali Anand	Self-represented
MPAC	John Cole
Town of Oakville	Susan Price

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property, located at 2447 Valley Forest Way, has an assessment of $1,231,000 for the 2017 and 2018 taxation years. Arun Anand (the “Appellant”) believed this assessment was too high and filed an appeal. He believes the assessment should be approximately $1,000,000, reflecting a range of value determined by the assessments of nearby properties.

2MPAC returned a value of $1,231,000. In preparation for the hearing, it prepared a valuation report with an opinion of current value of $1,390,000. MPAC explained that it was not seeking an increase in assessment and the higher current value opinion was intended to support the value returned.

3The Assessment Review Board (the “Board”) must decide two things in these appeals. Firstly, the Board must determine the current value of the subject property. Once that decision is made, the Board must then determine if the current value found needs to be reduced for the purpose of equitable assessment.

DECISION

4The Board finds the current value of the subject property is $1,279,000. The Board also finds that there is evidence to support a reduction in this amount in order to make it equitable with the assessments of similar lands in the vicinity.

5Accordingly, the assessment of 2447 Valley Forest Way for the 2017 and 2018 taxation years is reduced from $1,231,000 to $1,219,000, in the Residential property class.

LEGISLATION

6In making its determination of these appeals, the Board must consider the relevant sections of the Act.

7Section 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.

8Section 19.(1) of the Act states:

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

9Section 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.

What is the Current Value of the Subject Property?

MPAC’s Evidence

10MPAC submitted a valuation report that considered five properties in Oakville that it deemed to be comparable with the subject property. These five properties are located from 0.1 to 1.6 kilometres from the subject property. They are all single family dwellings with two storeys. They sold between March 2015 and August 2016 for prices ranging from $1,217,500 to $1,310,000. MPAC submits these five sales are an indicator of the value of the subject property.

11Each of these five proposed comparable properties has variables when compared to the subject property. MPAC submitted that:

• properties 1, 3, and 4 have swimming pools;
• property 2 abuts green space;
• properties 3 and 4 abut a ravine; and
• property 5 abuts a utility box.

12MPAC submitted that each of these variables has an impact on value, with green space, ravines, and swimming pools adding value, and utility boxes and being a corner lot (which affects the subject property) reducing value.

13MPAC believes that each of the five properties in their valuation comparison is inferior to the subject property, citing the larger lot and larger dwelling at the subject property as reasons for this determination.

14MPAC’s conclusion was that the time adjusted sale values of the five properties in their study support a value higher that the returned value, based on a per square foot of living area, when compared to the subject property. It found that the differences between the subject property and the comparable properties served to cancel one another out in terms of value, with the exception of living area.

15As the subject property is the largest dwelling among it and the five proposed comparable sales, MPAC submitted that a value that is higher than the sale values of the five proposed comparable sales is reasonable. Using this approach, MPAC arrived at a value for the subject property of $1,390,000. This value is just below the time adjusted sale value of Comparable #1 of $1,391,584.

Town’s Evidence

16The Town considered two properties for comparison, MPAC’s #1 and one other at 2455 Upper Valley Crescent. 2455 Upper Valley Crescent is a newer dwelling on a smaller lot with a swimming pool. It is a 2 storey dwelling with a total living area of 3,434 square feet; 1,110 square feet smaller that the subject property. It had a time adjusted sale value of $1,360,611.

17The Town submitted that when the time adjusted sale values of its two comparable properties are considered, the returned value of the subject property of $1,231,000 is reasonable, as it is a larger dwelling and the correct current value is likely higher than either of the two comparable properties.

Appellant’s Evidence

18The Appellant had no evidence. Even after repeated requests documented at the hearing by MPAC and the Town, the Appellant did not provide any disclosure. His main point was that properties in his immediate neighbourhood frequently sell in the $700,000’s and that should indicate the local market. He acknowledged that his property has a much larger dwelling that most of his neighbours. He noted that the subject property is a corner lot and that MPAC says this means it is worth 3% less. He submitted that the fact it is a corner lot should offset the value of it being a bigger lot that those in the surrounding neighbourhood.

19Specifically, the Appellant referenced three properties that, he said, indicate the value of the properties in the area. These properties are:

1. 2434 Valley Heights Crescent – 2016 assessment of $772,000;
2. 2433 Valley Heights Crescent – 2016 assessment of $772,000; and
3. 2385 Valley Heights Crescent – 2016 assessment of $707,000.

20The Appellant submitted further that, given this disparity in values in the neighbourhood, a reasonable assessment for the subject property ought to be in the range between the values of his neighbours and the returned value of the subject property, or approximately $1,000,000.

21He submitted that MPAC’s comparable properties and the Town’s 2455 Upper Valley Crescent were simply too far away from the subject property to be accurate comparisons to the subject for use in determining its current value.

Board’s Analysis

22The best evidence of current value is a sale of the subject property that occurred on or near the applicable valuation day. There has been no sale of the subject property for approximately 10 years. In that case, the best evidence is the sales of properties that are comparable to the subject property. This allows for the adjustment in value for various differences between the subject property and those properties it is being compared to. For this reason, the comparable properties used must be of reasonable similarity. They need not be identical nor should they be selected for any one specific characteristic of comparison.

23Because the definition of current value in the Act is based on sale value, comparable properties that have sold are the most useful to determine the current value of the subject property.

24There are six comparable properties in evidence that sold in 2015 or 2016. Five of these were advanced by MPAC and one additional property was used by the Town. All six were in what was described as ‘homogeneous neighbourhood A53’, the same as the subject property. The six properties sold for between $1,217,500 and $1,449,100, with sale dates between March 2015 and August 2016; all within eight months of the valuation day. Subject to adjustments for differences between these comparable properties and the subject property, the Board finds that this is a reasonable range in determining its current value.

25The Board finds that the best comparable property for the purpose is 2355 Valley Stream Place. This property was cited by both the Town of Oakville and MPAC. It is also in the immediate neighbourhood (100 metres away by MPAC estimate) and has a dwelling size that is the closest of all of the comparable properties in evidence. The remaining comparable sales before the Board are all farther away and are affected by proximity to open space, ravine, or utilities and are, therefore, less reliable as indicators of the current value of the subject property. Table A below compares 2355 Valley Stream Place with the subject property directly.

TABLE A

Characteristic	Subject property	2355 Valley Stream Place
Lot size	0.21 acres	0.16
Year Built	2000	2000
Quality of Construction	7.0	7.0
Dwelling Area (square Feet)	4,544	4,250
No. Storeys	2	2
Additional Structures	Attached Garage- 455 square feet	Attached Garage- 400 square feet In ground pool, 336 square feet (built in 2014)

26The three differences that need to be accounted for in this comparison are:

• The subject property is a corner lot;
• The comparable property has a swimming pool; and
• The subject property has a larger living area (4,544 square feet vs. 4,250 square feet for the comparable).

27MPAC testified that the corner lot variable applicable to the subject property has a 3% value reduction associated with it. This means that two identical properties, one a corner lot and one not would be valued differently by 3%. The Board heard from both MPAC and the Town that, while the corner lot carries a reduced value, the additional size of the corner lot would more or less account for that reduction. In this case the subject property has a larger lot, which would normally carry with it additional value over the comparable properties, but this additional value is offset by the corner lot condition. The Board views this ‘saw off’ in value to be reasonable.

282355 Valley Stream Place has an in ground swimming pool. The subject property does not. MPAC’s evidence included the assessed value of the swimming pool which was $38,261. The assessor testified that pools in this area carry values of between $30,000 and $60,000, depending on size, features and the specific neighborhood. The Board finds that the assessed value of the pool is a reasonable value for adjustment and removes it from that sale value for direct comparison to the subject property.

29Lastly, 2355 Valley Stream Place has a dwelling that is 294 square feet smaller than the subject property. By using its sale price and adjusting that price for the pool, a per square foot value can be determined that can then be applied to the subject property.

30Accordingly, the Board finds that the current value of the subject property is calculated as follows:

Sale value of 2355 Valley Stream Place - $1,234,500

Minus value in evidence of the swimming pool ($38,261) = $1,196,238

Divided by the square footage of 2355 Valley Stream Place (4,250 square feet) = $281.47 / square foot

Multiplied by the square footage of the subject property (4,544) = $1,278,999.

31The Board finds the current value of the subject property is $1,278,999 ($1,279,000, rounded).

Is a reduction in the current value necessary to achieve equitable assessment when reference is made to the assessments of similar properties in the vicinity?

32The Appellant did not make a submission on the question of equity of assessment, specifically. He cited the assessments of three properties in close proximity to his property. These assessments range for $700,000 to $707,000. He acknowledged that they are smaller houses than the subject property, on smaller lots. The air photo documents in evidence confirm these differences.

33MPAC submitted an equity analysis that compared the time adjusted sale value of 29 single family dwellings in the vicinity of the subject property with their corresponding 2017 assessments. Comparisons of such assessments and time adjusted sale values are a common means of determining if similar properties in the vicinity are equitable assessed. The comparison of these assessments to time adjusted sale values is called the Assessment to Sale Ratio (“ASR”). The range of ASRs in the sample was from 0.742 to 1.111, with a median of 0.933.

34MPAC’s analysis did not include the ASRs of four of the five properties used by MPAC to determine current value. MPAC’s properties 2 through 5 have ASRs of 1.142, 0.999, 1.010, and 0.918 respectively.

35The median ASR, according to MPAC means that properties that are similar to the subject property, in the same vicinity, are assessed at approximately 93.3% of their current value as determined through sales. MPAC’s analysis stated that a resultant median ASR that is below 0.95 is considered to mean current values should be reduced accordingly.

36The Town did not offer any evidence with respect to equitable assessment.

Board’s Analysis

37The concept of reducing the current value determined to make the subject property’s assessment equitable with that of similar properties in the vicinity requires the Board to change a correct assessment finding to one that is incorrect to make it fair and equitable. Adjustments for this purpose cannot therefore be made without compelling evidence to do so.

38The Appellant, who has the onus of burden of proof on the equitable assessment issue, submitted the assessments of three nearby properties on Valley Heights Crescent. Valley Heights Crescent is a street that is near the subject property. The Appellant submitted that, because these three properties, with assessments of $700,000, $703,000 and $707,000, are so near the subject property, they should be taken into consideration when determining the assessment of the subject property.

39The Board rejects this approach as a meaningful means of determining is a reduction in the current value is required to achieve equitable assessment, for two reasons.

40Firstly, the Act requires the Board to consider the assessments of similar properties in the vicinity. Simply identifying the three lowest assessments in MPAC list of 29 and applying those is to ignore the statistical impact of the other 26 properties in evidence.

41Secondly, in order to make a reduction based on the assessments of similar properties in the vicinity, their assessments must be compared to their current value, as represented by their time adjusted sale values. The Appellant’s submissions made no connection between the assessments of his three selected properties with their sale value. The Board disregards the Appellant’s argument accordingly.

42MPAC’s equity analysis indicates that, when the assessments of 29 similar properties in the vicinity of the subject property are compared with their time adjusted sale values, the result shows that properties are generally assessed below their current value. However, the data from four properties in evidence was not included in this analysis. In addition, MPAC relies on a median ASR to decide if the current value of a property should be reduced to arrive at an assessment that is equitable.

43In making its determination of any equity reduction, the Board must be convinced, by the best evidence available that the reduction is warranted. The Board finds that the mean ASR using all properties in evidence is the best evidence of whether or not a reduction in current value is required. When the four additional properties in evidence are added to MPAC’s list of 29 properties in its analysis, the results are:

• Mean ASR – 0.953
• Standard deviation - 0.083
• 95% Confidence Range - 0.028
• Low End of the Confidence Range – 0.924
• High End of the Confidence Range – 0.981

44These results indicate that it is highly likely that similar single family dwelling properties in the vicinity are generally assessed below their current value. The Board finds that this is the best evidence of whether or not the current value determined for the subject property should be reduced, and applies the mean ASR of 0.953 to the current value determined.

Accordingly, the current value determined of $1,279,000 is reduced by a factor of 0.953, for a reduced value of $1,218,887 ($1,219,000 rounded.)

CONCLUSION

45The Board finds the current value of the subject property is $1,279,000. The Board also finds that there is evidence to support a reduction in this amount for the purposes of equitable assessment.

46Accordingly, the assessment of 2447 Valley Forest Way for the 2017 and 2018 taxation years is reduced from $1,231,000 to $1,219,000, in the Residential property class.