Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 26, 2018 FILE NO.: WR 150742

Assessed Person(s): Barbara Andrea Wilkes, Andrew Crane G. Wilkes Appellant(s): Andrew Wilkes, Barbara Wilkes Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09 Respondent(s): City of Toronto

Property Location(s): 22 Donino Avenue Municipality(ies): City of Toronto Roll Number(s): 1908-081-430-08800-0000 Appeal Number(s): 3256694 Taxation Year(s): 2017 Hearing Event No. 691167

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

Heard: January 17, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Andrew Wilkes, Barbara Wilkes	Self-represented
MPAC	Carlo Bassi
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property comprises a single family dwelling on a lot measuring 50 feet by 121 feet, located in the ‘Hogg’s Hollow’ area of Toronto. The Appellants, Andrew and Barbara Wilkes believe that the value of the property is reflected by the lot because properties in the area have been sold for the purposes of re-development. They believe their property has some shortcomings with respect to size and configuration and as a result, they believe the assessment returned for the 2017 taxation year of $1,892,000 is too high.

2MPAC’s returned value is based on a market wide valuation method known as the direct comparison approach to value. Carlo Bassi, MPAC’s assessor has determined that the correct value is actually $2,092,000 based on a comparison of the subject property with 15 properties that have sold in the area. While he believes this is the correct current value, Mr. Bassi is not seeking an increase of the value returned, but submitted this opinion in support of the returned value.

3The Board must decide two things in this appeal. Firstly, the current value of the subject property must be determined for the 2017 taxation year, based on the evidence at the hearing. Having reference to the assessments of similar properties in the vicinity, the Board must also determine if the current value found should be reduced to be fair and equitable.

DECISION

4The Board finds that the current value of the property at 22 Donino Avenue is $1,700,000. As there is evidence to suggest a reduction in this amount is necessary for it to be fair and equitable, the assessment is reduced to $1,603,000.

5Accordingly, the assessment of 22 Donino Avenue in the Residential property class is reduced for the 2017 taxation year from $1,892,000 to $1,603,000.

LEGISLATION

6In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“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 and Position

10Mr. Bassi carried out a valuation of the subject property using the direct comparison approach, whereby similar properties in the area that have sold in proximity to the statutory valuation day are used to approximate the current value of the property under appeal. Mr. Bassi stated that differences in characteristics between the comparable properties and the subject property are considered and appropriate adjustments to value are made to arrive at a value that MPAC considered reasonable.

11Mr. Bassi stated that because market conditions and sale prices change over time, and because the comparable properties were not sold on the valuation day of January 1, 2016, Time Adjustment Factors (“TAF”) are applied to adjust the sale value of each of the comparable properties to show their likely sale value as if they were sold on January 1, 2016. The TAFs in this case are derived from 366 sales of residential properties in the market area, between May 2014 and December 2016.

12In his analysis, Mr. Bassi used the sales of 15 properties that he found to be the most comparable to the subject property. The range of the Time Adjusted Sale (“TAS”) values of these 15 comparables is $1,971,601 to $3,069,924. The details of the characteristics of Mr. Bassi’s comparable properties are summarized in Table A.

TABLE A

Lot Area (acres)	Sale Price ($)/Date	TAS Price ($Mil.)	2016 CVA ($Mil.)	2016 A-TASR	TAS Price / Acre ($Mil.)	2016 CVA / Acre ($Mil.)	Nbhd.
Subject Property	0.139	N/A	N/A	1.892	N/A	13.612	Hogg’s Hollow
Sale 1	0.196	2.397	1.746	.728	12.28	8.908	Hogg’s Hollow
Sale 2	0.183	2.089	1.962	.939	11.414	10.721	York Mills
Sale 3	0.225	2.758	2.228	.808	12.259	9.902	York Mills
Sale 4	0.152	1.972	2.143	1.087	12.971	14.099	Wanless Park
Sale 5	0.184	2.101	1.772	.843	11.418	9.630	Hogg’s Hollow
Sale 6	0.300	3.070	2.423	.789	10.233	8.077	York Mills
Sale 7	0.195	2.289	1.969	.860	11.739	10.097	Hogg’s Hollow
Sale 8	0.206	2.746	2.130	.776	13.332	10.340	York Mills
Sale 9	0.184	2.004	1.735	.861	10.894	9.429	Hogg’s Hollow
Sale 10	0.183	2.425	4.207*	13.251	York Mills
Sale 11	0.193	2.704	2.058	.761	14.010	10.663	Hogg’s Hollow
Sale 12	0.299	2.852	2.380	.835	9.538	7.960	York Mills
Sale 13	0.152	2.075	1.567	.755	13.651	10.309	York Mills
Sale 14	0.139	2.047	1.351	.660	14.725	9.719	York Mills
Sale 15	0.159	2.133	2.208	1.035	13.418	13.887	Wanless Park

*CVA indicated is returned value after sale, with new dwelling

Appellants’ Evidence and Position

13The Wilkes disagreed with the list of comparables used by MPAC for its valuation. They submitted:

• Properties east of Old Yonge Street (“York Mills”) are in a different neighbourhood with different characteristics and are not as comparable as properties in their neighbourhood west of Old Yonge Street;
• Properties to the south east, in the “Wanless Park” area are also too far away to be considered to be in a similar enough neighbourhood for the purposes of value comparison;
• While MPAC places value on the lot improvements (houses and structures) the market conditions in place at or near the valuation day show that properties are being purchased to demolish the existing houses for the purpose of replacing them with larger houses. As a result, property values in the area reflect the land portion only.

Board’s Analysis

14MPAC has used a total of 15 comparable properties to arrive at its determination of current value using the direct comparison approach. This is a relatively large sample for a single family dwelling and this larger sample provides a reliable set of conclusions. The Wilkes did not propose alternative comparable properties to add to this list, but expressed some concern with the comparability of some of the properties used by MPAC, particularly those properties that are not within the immediate ‘Hogg’s Hollow’ neighbourhood where the subject property lies.

15The Board shares the concern of Mr. and Ms. Wilkes with respect to the two properties in the ‘Wanless Park’ neighbourhood. The Board disregards those two properties in its determination of current value. The Board is satisfied by the evidence that they do not share the same characteristics as the subject neighbourhood with respect to its transition toward re-development.

16The Wilkes made a strong case for their view regarding property values in the area being driven by lot size and the future developability of properties. Ms. Wilkes served on the executive of a local residents’ association that had an interest in the impact on the neighbourhood of lots in the area that were purchased and re-developed with larger houses. While these re-developments often require a successful application through the City’s Committee of Adjustment to vary the lot coverage percentage, Ms. Wilkes testified that to her knowledge these applications are generally approved.

17The Board views Ms. Wilkes’ testimony to be credible and informed regarding the nature of the neighbourhood and its transitional nature. Mr. Bassi did not make any submissions about the transitional nature of the neighbourhood.

18The Board also notes that the 15 sales used by MPAC show a close relationship between lot size and sale price, while there is much more variance in the price per square foot of building area. Accordingly, the Board finds the best indicator of the value of the subject property is the median per acre value of the lots indicated in MPAC’s sample.

19When the two ‘Wanless Park’ lots are removed from the sample, the resultant TAS value per acre of lot area is $12,227,571. When this is applied to the subject property’s area of 0.139 acres, the resultant value is $1,700,000 (rounded).

20The Wilkes made much of the topographic challenges of the subject lot, indicating the change in elevation from the street line to the back of the lot is several metres. They submit this makes the lot less desirable for development and hence, indicates a lower value than if it were flat or with a gentle slope. They testified that other lots with slopes have only been successfully re-developed by installing elevators, which is a significant cost over the development of other nearby properties.

21However, the Board did not hear any specific evidence as to what an adjustment might be owing to a sloped lot. The Board doesn’t doubt the assertion necessarily, but without specific evidence of the impact of the sloped condition on value, there is no way to adjust the value for that unquantified variable.

22The Board finds that the current value of the subject property is $1,700,000.

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?

23The only evidence before the Board with respect to the equitable assessment of the subject property is the Equity Analysis, prepared by Mr. Bassi. The study indicates that, when the TAS value of some thirty properties in the vicinity are compared to their 2016 current value assessment (”CVA”), there is no reason to reduce the current value determined above for the subject property to make it equitable.

24Mr. Bassi testified that the equity analysis shows the median Assessment to Sale Ratio (“ASR”) to be in the range acceptable by MPAC to consider similar properties in the vicinity of the subject properties to be assessed equitably. He also supported the findings of the study by showing the co-efficient of dispersion (“CoD”), being within the range considered acceptable by the International Association of Assessing Officers(“IAAO”) and MPAC.

25In reviewing the 30 properties in the equity analysis sample, the Board notes that four of the properties in MPAC’s Valuation Report appear, but the other 11 do not. It is clear that these other 11 properties would provide a larger and more reliable sample if they were included. Property 10 at 102 Highland Crescent was not added owing to its 2016 CVA being reported with a new dwelling; making it erroneous for the purpose, because the subject property was not redeveloped on the valuation day, nor were the remaining 40 properties in the expanded sample.

26When the sample is augmented by the remaining ten properties in MPAC’s valuation analysis, the median ASR changes from 0.964 to 0.943. This is an important distinction because MPAC considers a median ASR of 0.95 to 1.05 to indicate that properties are equitably assessed. The result with the added ten properties in evidence is a median ASR below 0.95, suggesting an adjustment is necessary because similar properties in the vicinity are being assessed at less than 95% of their current value as determined by market sales.

27Accordingly, the Board finds that the evidence submitted at the hearing shows that the current value determined above should be reduced by the resultant ASR of 0.943 to make the assessment of the subject property equitable with the assessments of similar properties in the vicinity.

CONCLUSION

28The Board finds that the current value of the property at 22 Donino Avenue is $1,700,000. As there is evidence to suggest a reduction in this amount is necessary for it to be fair and equitable, the assessment is reduced to $1,603,000.

29Accordingly, the assessment of 22 Donino Avenue, in the Residential property class is reduced for the 2017 taxation year from $1,892,000 to $1,603,000.