Irina Volfson v. Municipal Property Assessment Corporation, 2018 CanLII 14221

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 15, 2018

FILE NO.: WR 149692

Assessed Person(s): Irina Volfson

Appellant(s): Irina Volfson

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region No. 14

Respondent(s): City of Vaughn

Property Location(s): 100 Arnold Avenue

Municipality(ies): City of Vaughan

Roll Number(s): 1928-000-020-63000-0000

Appeal Number(s): 3255551

Taxation Year(s): 2017

Hearing Event No.: 690265

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

Heard: December 8, 2017 in Maple, Ontario

APPEARANCES:

Parties	Representative
Irina Volfson	Roman Volfson
MPAC	Leo Verduci
City of Vaughn	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1The Subject Property is a two-storey single-family detached home (not on water) located at 100 Arnold Avenue in the City of Vaughn. It has 7,561 square feet (“sq. ft.”) of total building area in addition to 3,352 sq. ft. of finished basement area. The property was built in 2003 and MPAC has assigned it a quality of construction rating of 8.5. The total lot size is 0.71 acres.

2Leo Verduci, representing MPAC, stated that the assessment was returned at $4,120,000 for the 2017. However, he estimates the current value for the subject property to be $3,955,000, using the direct comparison approach. He is also of the opinion that an equity adjustment is required under the Assessment Act (“Act”). Accordingly, Mr. Verduci submits that the assessment should be reduced from $4,120,000 to $3,717,700for the 2017 taxation year.

3Roman Volfson, on behalf of the Appellant, submits that the assessment for the Subject Property is too high and should be assessed at $3,500,000.

4Under the Act, the Assessment Review Board (“Board”) must first determine the correct current value of the land and then determine whether it should be adjusted to make it equitable with the assessments of similar lands in the vicinity.

DECISION

5For the reasons stated below, the Board finds the current value of the Subject Property, as of the valuation day of January 1, 2016, is $3,955,000. Furthermore, the Board finds that, to make the assessment of the Subject Property equitable with that of similar lands in the vicinity, it is necessary to reduce the assessment below the current value as determined of $3,955,000 to $3,717,000.

6Accordingly, for the 2017 taxation year, the assessment is reduced from $4,120,000 to $3,717,000.

REASONS FOR DECISION

The Legislation

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 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 each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

Exception

(5) Subsection (1) does not apply in respect of the valuation of land for a taxation year after 2004 if the Minister prescribes a different day as of which land is valued for that year.

10Section 44(1) of the Act states:

Assessment may be open upon appeal

44(1) Upon an appeal on any ground against an assessment, the Assessment Review Board or court, as the case may be, may reopen the whole question of the assessment so that omissions from, or errors in the assessment roll may be corrected, and the amount for which the assessment should be made, and the person or persons who should be assessed therefor may be placed upon the roll, and if necessary the assessment roll, even if returned as finally revised, may be opened so as to make it correct in accordance with the findings made on appeal.

11Section 44(3) of the Act states:

Same 2009 and subsequent years

44(3) 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.

THE BOARD’S ANALYSIS

MPAC’s Case

12Mr. Verduci relies on a Valuation Report. He provided information on the sales of three properties.

13He submits that the property located at 131 Thornbridge Drive has a similar lot size at 0.76 acres and the same quality of construction rating of 8.5. However, it is two years older than the Subject Property and its total building area is smaller at 6,912 sq. ft. It sold on June 30, 2016 for $4,180,500 (time adjusted sale (“TAS”) of $3,838,345). He considers this property as inferior. Accordingly, the Subject Property’s current value should be higher.

14He considers the property located at 124 Arnold Avenue as most comparable to the Subject Property. It has a similar lot size at 0.7 acres and the same quality of construction rating at 8.5. It has a larger total building area at 8,125 sq. ft. and is 12 years older. It sold on August 26, 2015 for $3,776,000 (TAS of $4,073,063).

15The property located at 136 Thornbridge Drive has the same quality of construction rating of 8.5. However, it has a smaller lot size at 0.59 acres, is six years older and its total building area is much larger at 8,908 sq. ft. than the Subject Property. It sold on September 10, 2015 for $3,780,000 (TAS of $4,007,320). He considers this property as superior. Accordingly, the Subject Property’s current value should be lower.

16He estimates the current value of the Subject Property to be $3,955,000 which he calculated as the average time adjusted sale price.

17Mr. Verduci also relies on an Equity Analysis Report that considered the time adjusted sales of 30 single-family residential properties located within 0.5 kilometres of the subject property that occurred within the period of January 1, 2015 to December 31, 2016.

18Mr. Verduci states in his report that level of appraisal is established by determining the median Assessment to Sales Ratio (“ASR”) in the sales sample. The International Association of Assessing Officers (“IAAO”) standards state that the level of appraisal for all property types should fall between 0.90 -1.10. In this instance, the sales sample produced a median ASR of 0.94.

19Mr. Verduci determined an equitable value by multiplying the estimated current value of $3,955,000 by the level of assessment of 0.94 resulting in the value of $3,717,700. He recommends an equity adjustment.

20Therefore, he submits that the assessment of $4,120,000 should be reduced to $3,717,000 for the 2017 taxation year.

Appellant’s Case

21Mr. Volfson stated that the Subject Property is his wife’s house and they have lived there since it was purchased in 2010. He did not recall the purchase price. He submits that it is assessed too high and should be assessed at $3,500,000.

22Mr. Volfson did not submit any sales comparables on his own. However, he did comment on the sales comparables submitted by MPAC.

23He is of the opinion that the property at 124 Arnold Avenue is not a good comparable as it has been heavily renovated. He added that construction was ongoing for about the past 6 months and that work was just completed. He did not know if anyone lived there during that time. He stated that he used to see people working there every day. Although he has never been inside, he states that it is a much nicer house than his own that needs work done on it.

24He is also of the opinion that the property at 136 Thornbridge Drive, is not a good comparable as it has a much bigger total building area.

25He stated that the property at 131 Thornbridge Drive is also much nicer than his own property and has also been renovated. He would drive by and see people working there. He has not been inside this property.

26Mr. Volfson also referenced the sales at the properties located at 65 and 114 Arnold Avenue and 129 Thornbridge Drive included in Appendix B to the Equity Analysis Report, all with time adjusted sales (and current value assessments) that are much lower than MPAC’s revised assessment of $3,717,000.

Current Value

27The initial task of the Board is to use the best evidence available to determine the current value of the property as required by s. 1, s. 19.(1) and s. 44.(3)(a) of the Act.

28The 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 day or close to it. If, as in this case, no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the valuation date of January 1, 2016. The measure acts as a benchmark and a gauge of the accuracy for the assessed value of the subject property and comparable properties.

29To enable an estimate of value for the Subject Property to be derived from suggested comparable properties, there must be sufficient elements of similarity, in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etcetera so as to enable a direct comparison to be made between a suggested comparable property and the Subject Property.

30The Board has considered the three sales comparables in evidence.

31The property located at 131 Thornbridge Drive has a slightly larger lot size at 0.76 acres and the same quality of construction as the Subject Property. However, it is slightly older having been built in 2001 and its total building area is smaller at 6,912 sq. ft. is 649 sq. ft. smaller than the Subject Property It sold on June 30, 2016 for $4,180,500 (TAS of $3,838,345). The Board finds the property to be reasonably comparable to the Subject Property.

32The property located at 124 Arnold Avenue is similar to the Subject Property in terms of lot size at 0.70 acres and the same quality of construction. However, it has a larger total building area at 8,125 sq. ft. and is 12 years older. It sold on August 26, 2015 for $3,776,000 (TAS of $4,073,063). The Board finds the property to be reasonably comparable to the Subject Property and that differences in age and additional building area offset each other.

33The property located at 136 Thornbridge Drive is similar to the Subject Property in terms of quality of construction. However, it has a smaller lot size at 0.59 acres and is older having been built in 1997. However, its total building area at 8,908 sq. ft. is significantly larger by 1,347 sq. ft. than that of the Subject Property. It sold on September 10, 2015 for $3,780,000 (TAS of $4,007,320). The Board finds this property to be superior to the Subject Property given that it is substantially larger in terms of total building area.

34Mr. Volfson submitted that the properties located at 131 Thornbridge Drive and 124 Arnold Avenue are better properties given their renovated condition. However, based on Mr. Volfson’s evidence, the renovations took place after the sales and, therefore, the sale prices for these two properties would therefore reflect their pre-renovated condition. In reply to Mr. Verduci’s closing submission, Mr. Volfson then stated that he was not sure when the renovations took place and that they may have occurred two to three years earlier. Having considered the evidence presented at the hearing, the Board finds, based on a balance of probabilities, than the sale prices for the properties at 131 Thornbridge Drive and 124 Arnold Avenue reflect their pre-renovated condition.

35Mr. Volfson also referenced the properties at 65 and 114 Arnold Avenue and 129 Thornbridge Drive included in Appendix B to the Equity Analysis Report. The Board was unable to consider these sales as key property details Subject Property. As noted above, all had lower time adjusted sales (and current value assessments).

36Based on the evidence, the Board finds that the current value for the Subject Property is the average of the time adjusted sales for 131 Thornbridge Drive and 124 Arnold Avenue of $3,955,000 (rounded). Therefore, the Board sets the current value at $3,955,000 (rounded).

Equity with Similar Lands in the Vicinity

37The Board must also consider the assessments of similar properties in the vicinity and determine whether the correct current value, as established, is inequitable relative to those assessments. If so, it should be adjusted to make it equitable, as required by s. 44.(3)(b) of the Act.

38For purposes of establishing equity, properties do not need to be comparable, they need to be of a similar nature and within a reasonable proximity Considering an ASR analysis using a reasonable sample of property sales is one method for that purpose.

39Mr. Verduci prepared an Equity Analysis Report that considered the time adjusted sales of 30 single-family residential properties located within 0.5 kilometres of the Subject Property that occurred within the period of January 1, 2015 to December 31, 2016. In this instance, the sales sample produced a median ASR of 0.94, indicating that similar properties in the vicinity are assessed at values that are lower than their current value assessments and that an adjustment is warranted.

40The Board multiplied the current value as determined above of $3,955,000 by the median ASR of 0.94 resulting in the value of $3,717,700 or $3,717,000.

CONCLUSION

41The Board finds the current value of the Subject Property, as of the valuation day of January 1, 2016, is $3,955,000. Furthermore, the Board finds that, to make the assessment of the Subject Property equitable with that of similar lands in the vicinity, it is necessary to reduce the assessment below the current value as determined of $3,955,000 to $3,717,000.

42Accordingly, for the 2017 taxation year, that assessment is reduced from $4,120,000 to $3,717,000.