Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 01, 2018 FILE NO.: WR 152692

Assessed Person(s): Anat Sasson Appellant(s): Anat Sasson Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 14 Respondent(s): City of Vaughan

Property Location(s): 10 Erica Road Municipality(ies): City of Vaughan Roll Number(s): 1928-000-031-69000-0000 Appeal Number(s): 3251372 Taxation Year(s): 2016 Hearing Event No.: 696179

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

Heard: April 20, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Anat Sasson	Andrew Attard
MPAC	Leo Verduci
City of Vaughan	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

1Anat Sasson is the owner of a two-storey residential dwelling located at 10 Erica Road (the “subject property”) in the City of Vaughan. The dwelling has 5,691 square feet (sq. ft.) of building area and was built in 1999. It has been assigned a quality of construction rating of 8.5. It is located on a site area of 0.78 acres.

2For the 2016 taxation year under appeal, MPAC returned the assessment for the property at $2,470,000.

3Anat Sasson (the “Appellant”) appealed the assessment for the 2016 taxation year to the Assessment Review Board (“Board”). Andrew Attard, the Appellant’s representative, states that there is no issue with respect to current value. Both parties agree on a current value of $2,470,000. However, it is Mr. Attard’s position, based on his Equity Study, that an equity adjustment is required and the subject property should be assessed at $2,050,000 for the 2016 taxation year.

4MPAC’s representative, Leo Verduci, concurs that there is no issue as to current value. However, based on Mr. Verduci’s Equity Analysis Report, it is his position that an equitable reduction is not required. He concludes that the assessment should be confirmed at $2,470,000 for the 2016 taxation year.

ISSUE

5The issue to be determined is whether there should be an equitable reduction of the current value of $2,470,000 and, if so, what should the amount of this reduction be?

DECISION

6The Board finds that that the evidence supports the conclusion that the current value of $2,470,000 requires an equity adjustment under s. 44.(3)(b) of the Act.

7The assessment of the property located at 10 Erica Road is reduced from $2,470,000 to $2,173,600 for the 2016 taxation year.

MPAC’s Evidence

8Mr. Verduci relies on an Equity Analysis Report that considered the time adjusted sales of 30 residential properties that occurred between January 1, 2011 and December 31, 2012, within 0.55 kilometres from the subject property. They are similar in terms of nature, character or function. He described the neighbourhood around the subject property as a mix of different types of homes with some older homes, some in the middle and some new construction.

9In his Equity Analysis Report, Mr. Verduci states that the level of appraisal is established by determining the median Assessment to Sale Ratio (‘ASR”) in the sales sample. For purposes of the equity test, MPAC takes the position that equity is achieved if the median ASR falls between 0.95 and 1.05. In this case, the median ASR of 0.975 falls within this range indicating that current value assessments are reflective of sales in the vicinity.

10Equity among individual properties is measured through the Coefficient of Dispersion (COD). The COD measures the average percentage deviation of all the individual ratios from the median ratio. In this instance, the COD is 12.1 meaning that individual ratios differ, on average by 12.1% from the median ratio. MPAC standards call for CODs of not more than 15% for residential properties. Mr. Verduci is of the opinion that the COD of 12.1% demonstrates “good equity” among individual properties

11Based on his analysis, he concludes that an equity adjustment is not required. Therefore, Mr. Verduci concludes that the assessment for the subject property should be confirmed at $2,470,000 for the 2016 taxation year.

Appellant’s Evidence

12It is Mr. Attard’s position that an equity adjustment is required and that the subject property should be assessed at $2,050,000.

13Mr. Attard relies on an Equity Study involving a sample of 30 residential sales that have not been time adjusted to the January 1, 2012 valuation date. He applied a different filter to include high value properties with actual sales between $1,200,000 and $3,700,000 that occurred in 2011 and 2012. He asserts that high value properties are more comparable to the subject property in terms of character and attract a different kind of buyer. He added that he did not time adjust these sales as the sales are fairly distributed in the shoulder years to the January 1, 2012 valuation date and that the market was steady. The current value of $2,470,000 for the subject property falls in the middle of the range of $1,200,000 and $3,700,000. He states that of the 500 or so sales that occurred in 2011 and 2012, only 100 sales were greater than $1,200,000. The properties considered within his Equity Study are located within 0.95 kilometres of the subject property. He determined a median ASR of 0.83.

14Mr. Attard takes the position that an equity adjustment is required

15Mr. Attard concludes that that the current value should be reduced from $2,470,000 to $2,050,000.

Board’s Analysis and Findings

16Section 44.(3)(b) of the Act directs that after determining current value, the Board shall 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.”

17The purpose of equitable adjustment has been described as the equitable distribution of the tax burden according to the assessed value of property owned by taxpayers as follows by the Ontario Court of Appeal in Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) at page 2:

A prime objective of municipal taxation is the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.

18In addressing equity in assessment, the Court, at page 6, also noted that “an assessment made at the actual value of lands and buildings…would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred [emphasis added].”

19The term “vicinity” is not defined in the Act, but refers to the appropriate geographical area that will yield a meaningful number of comparables (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (ON CA) at page 6).

20The test set out in s. 44.(3)(b) of the Act, requires that the Board refer to similar lands in the vicinity. Similar property relates to the same general nature, character or function. Use as a point of similarity, may be, but is not necessarily determinative of similarity. In determining whether other lands are similar, the Ontario Divisional Court, in Municipal Property Assessment Corp. v. Loblaw Properties Ltd., [2017] O.J. No. 1010 ONSC 1299, 276 A.C.W.S. (3d) 220, 2017 ONSC 1299, 62 M.P.L.R. (5th) 253, 2017 CarswellOnt 2861, applied the decision of the Ontario Divisional Court in Trizec Equities Ltd. v. Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182, 27 O.A.C. 203, 37 M.P.L.R. 175, 8 A.C.W.S. (3d) 399. The Court stated at paragraph 23:

…All points of comparison must be considered. The Board must make a factual finding based on such a consideration. One point of similarity such as use may be, but is not necessarily, determinative. Some similarities may be overridden by other characteristics and some differences may be subordinated.

21The ASR analysis of a reasonable sample of sold properties is one method used to determine if properties in the vicinity are assessed below their current value. If other properties are assessed substantially below their current value then a reduction is required to make the assessment of the subject property equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the sale price.

22Mr. Verduci relies on an Equity Analysis Report that considered the time adjusted sales of a mix of 30 residential properties that occurred in 2011 and 2012 and that are located within 0.55 kilometres of the subject property. In this instance, the sales sample produced a median ASR of 0.975. Based on his study, it is his position that an equity adjustment is not required.

23Mr. Attard takes the position that an equity adjustment is required. He relies on a study of 30 residential sales located within 0.95 kilometres of the subject property. He applied a different point of comparison to include high value properties with actual sales between $1,200,000 and $3,700,000 that occurred in 2011 and 2012. The sales sample produced an ASR of 0.83. Based on his Equity Study, it is his position that an equity adjustment is required.

24The Board has considered both studies. However, Mr. Attard’s evidence is that high value properties with sales between $1,200,000 and $3,700,000 are more comparable to the subject property in terms of character and attract a different kind of buyer. This evidence was not contradicted by MPAC. Consequently, the Board finds that the high value properties are similar lands to the subject property. Therefore, the properties considered in an equity analysis should be high value properties with sales in the range of $1,200,000 to $3,700,000.

25For comparison purposes, the Board finds that it should only consider time adjusted sale values and has time adjusted the 30 sales in Mr. Attard’s Equity Study.

26The Board finds that MPAC’s Equity Analysis Study of 30 sales includes the sales of eight properties with ASRs that fall within the ASR range of 0.95 to 1.05 used by MPAC to determine if equity is achieved. The Board finds that Mr. Attard’s Equity Study only includes the sales of six properties with ASRs that fall within the ASR range of 0.95 to 1.05. So, both studies include outliers.

27Furthermore, in applying Mr. Attard’s point of comparison of high value properties, the Board found that ten properties in MPAC’s Equity Analysis Study have time adjusted sales within the range of $1,200,000 to $3,700,000 with a resulting median ASR of 0.985. This ASR of 0.985 falls within the ASR range of 0.95 to 1.05. The Board also found that of the ten higher value properties, four have ASRs less than 0.95, three have ASRs greater than 1.05 and only three have ASRs that fall within the range of 0.95 and 1.05. Again, most ASRs fall outside of the ASR range of 0.95 to 1.05 that is used to determine if equity is achieved.

28The Board finds that a resulting median ASR of 0.855 when sales in Mr. Attard’s Equity Study are time adjusted as opposed to a median ASR of 0.83 for actual sales. This Equity Study also considered three of the four sales comparables (99 Thornridge Drive, 56 Thornridge Drive and 47 Thornbank Road) used in MPAC’s current value study whereas MPAC’s Equity Analysis Report did not. The Board has included the ASR of 0.85 for 18 Arnold Avenue, MPAC’s fourth sales comparable, into the mix of sales included in Mr. Attard’s Equity Report, resulting in a median ASR of 0.85.

29Five time adjusted sales included in MPAC’s Equity Analysis Study also fall within Mr. Attard’s point of comparison of high value properties with sales in the range of $1,200,000 to $3,700,000. Adding in the ASRs for the five sales properties that appear in MPAC’s Equity Analysis Study only (26 Braemar Court (ASR 0.88), 3 Oakbank Drive (ASR 0.90), 81 Thornbank Road (ASR 1.00), 57 Thornbank Road (ASR 1.08) and 72 Green Acres Road (ASR 1.13)) into the mix of sales included in Mr. Attard’s Equity Report, results in a median ASR of 0.88 for a sample size of 36 properties.

30In accordance with the Board’s finding above, the Board will use Mr. Attard’s point of comparison of high value properties with sales in the range of $1,200,000 to $3,700,000, with a slightly larger vicinity of 0.95 kilometres from the subject property. However, the Board will use the larger sample of 36 sales. The Board finds that the equity analysis of the larger sales sample clearly demonstrates that these properties are assessed substantially below their current values.

31The Board finds that the evidence before it supports the conclusion that an equity adjustment is required. Applying the median ASR of 0.88 to the current value of $2,470,000 results in the value of $2,173,600.

CONCLUSION

32The Board finds that that the evidence supports the conclusion that the current value of $2,470,000 requires an equity adjustment under s. 44.(3)(b) of the Act.

33The assessment of the property located at 10 Erica Road is reduced from $2,470,000 to $2,173,600 for the 2016 taxation year.