Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 04, 2018

FILE NO.: WR 151843

Assessed Person(s): Xuanxuan Wang, Bin Yao

Appellant(s): Bin Yao

Respondent(s): Municipal Property Assessment Corporation ("MPAC"), Region 15

Respondent(s): City of Mississauga

Property Location(s): 5292 Longford Drive

Municipality(ies): City of Mississauga

Roll Number(s): 2105-150-070-21730-0000

Appeal Number(s): 3228573 and 3304721 (deemed 2018 appeal)

Taxation Year(s): 2017 and 2018 (deemed appeal)

Hearing Event No.: 696477

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

Heard: March 23, 2018 in Mississauga, Ontario

APPEARANCES:

Parties	Representative
Bin Yao	Self-represented
MPAC	Laurie DeWinter
City of Mississauga	No-one appeared

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS

INTRODUCTION

1This is an appeal of the assessed value of 5292 Longford Drive in the City of Mississauga. The Appellant, Bin Yao, takes the position that the assessment of $877,000, for the 2017 taxation year, is too high.

2MPAC takes the position that the assessment as returned of $877,000 is correct and equitable.

LEGISLATION

3Section 44.(3)(a) of the Assessment Act ("Act") requires the 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, I must determine what the property would have sold for in an arm’s length transaction on the valuation day, set pursuant to s. 19.3 of the Act, which, in this case is January 1, 2016 for the 2017 and 2018 taxation years.

4Once I have determined the current value, s. 44.(3)(b) requires that I "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.

DECISION

5For the reasons stated below and pursuant to s. 44.(3)(a) of the Act, I find that the current value of the subject property for the 2017 and 2018 taxation years is $949,000. The evidence demonstrates that, pursuant to s. 44.(3)(b), a reduction is required to make the assessment equitable with that of similar properties in the vicinity. I therefore reduce the assessment for the 2017 and 2018 taxation years from $949,000 to $868,000.

6Accordingly, the assessment as returned for the 2017 and 2018 taxation years is reduced from $877,000 to $868,000 in the residential property class.

PRELIMINARY ISSUE

7At the commencement of the hearing both parties raised the issue of disclosure. In September 2017 the Board sent a letter to the parties advising them to complete their exchange of disclosures by January 5, 2018 and to complete a mandatory settlement meeting by March 2, 2018.

8MPAC advised the Board they completed their disclosure to Mr. Yao on January 4, 2018. They further advised the Board they did not receive Mr. Yao’s disclosure until February 14, 2018. In an email to the Board dated March 9, 2018, MPAC objected to the Appellant’s evidence being presented because the Appellant failed to comply with the dates set out in the Board’s September 2017 letter.

9Mr. Yao stated he submitted all of the documents in his disclosure when he filed his initial Request for Reconsideration, arguing MPAC had his disclosure from the beginning of the process. He also said he did not fully understand what was expected of him. The Board notes that English is not Mr. Yao’s first language.

10Mr. Yao stated he did not receive MPAC’s disclosure because MPAC used the wrong email address.

11The parties agreed they had two settlement conferences, one on February 14, 2018 and the second on February 22, 2018. They also agreed that they had sufficient time to review each other’s documents and were prepared to proceed with the hearing.

12Having considered the parties’ submissions, the Board’s Rules of Practice and Procedure ("Rules"), particularly Rules 4, 5 and 45, and the fact that both parties were prepared to proceed with the hearing, I declined to exclude any of the disclosures. I find that Mr. Yao did not contravene the Board’s deadlines because he believed that MPAC retained his evidence from the Request for Reconsideration process. However, the evidence is not clear as to whether MPAC sent its disclosure to an incorrect email address. What is clear is that both parties were sufficiently prepared to proceed with a full hearing.

CURRENT VALUE

13The best evidence of the current value of a residential property is the sale of that property on or near the valuation day. When that evidence is not available, the sales of similar properties on or near the valuation day are the next best evidence.

145292 Longford Drive, located in the City of Mississauga, is a two-storey single-family detached house built in 2010 measuring 2941 square feet with 1,277 square feet of basement area and an attached garage. The lot has an effective frontage of 45.01 feet and an effective depth of 85.3 ft. or approximately 3,839 square feet.

15Mr. Yao submitted one property, 3130 Galbraith Drive as a suggested comparable. It was assessed at $801,000 and was listed for sale at $1,088,888. The actual sale amount and sale date were not provided. 3130 Galbraith Drive is similar to the subject property in terms of building size although it is older (1986) and it is a corner lot which is approximately twice the size (8,028 sq. ft.) as the subject property. Mr. Yao argued that MPAC has valued lots in his neighbourhood at $1.00 per square foot and this should be reflected in the difference in valuations between 3130 Galbraith Drive and the subject property. Mr. Yao provided no evidence to support his claim regarding MPAC’s land values. Because the sale date and sale amount were not provided, and this information is absolutely critical for any current value analysis, I am not able to use this property in determining the subject property’s current value.

16MPAC submitted five sales to support the current value, which was estimated at $964,000. This value was based on the median time-adjusted value per square foot of the five sales ($328.00) multiplied by total building area of the subject property (2941 sq. ft.) The five sales proposed by MPAC all took place within eleven months of the January 1, 2016 valuation dates. The evidence shows that all of the sale properties are similar to the subject property in terms of age (2008 to 2010), construction, size, quality and location.

17MPAC time adjusted its sales to reflect what the sale values may have been on the January 1, 2016 valuation day. MPAC used Time Adjustment Factors ("TAF"), a Sales Ratio Trend Analysis ("SRTA") and a Sale to Assessment Ratio Study ("SAR") (Exhibit 1).

18The relevant characteristics of the sales provided by the parties are set out in the table below:

Subject Property and Sales A-E	House Size (sq. ft.)	Lot Size (sq. ft.)	Assessed Value at January 1, 2016	Sale Date	Time Adjusted Sale Price
5292 Longford Drive	2,941	1,277	$877,000
A 5321 Longford Drive	3,095	1,487	$902,000	August 18, 2015	$972,316
B 5358 Mallory Road	2,941	1,277	$877,000	November 30, 2015	$896,071 (originally $880,000)
C 5370 Mallory Road	2,732	1,393	$848,000	July 27, 2015	$895,917
D 5296 Longford Drive	2,732	1,393	$848,000	June 1, 2015	$898,316
E 5317 Longford Drive	2732	1,393	$848,000	February 27, 2015	$914,857

19I find that the Sale A property is superior to the subject property in terms of building and lot size. As a result, I find that the current value of the subject property would be less than $972,316.

20Mr. Yao argued that, although the Sale B property is quite similar to his property, was built by the same builder, is the same model and is the same age, it is superior to the subject property. He submits that the Sale B property has hardwood floors whereas the subject property has carpeting. Mr. Yao argued that hardwood floors increase the value of a property however he could not specify what the difference in value should be. The Sale B property backs onto other single-family detached homes whereas the subject property backs onto semi-detached homes. Although Mr. Yao felt this lessens the value of his home in relation to the Sale B property, he did not provide any evidence to quantify this issue. The subject property has a sewer drain in the back yard whereas the Sale B property does not. Again, Mr. Yao argued that the sewer drain makes his property inferior to the Sale B property but could not quantify it. While these three issues may result in the subject property being inferior to the Sale B property, no evidence was submitted to quantify the difference. I cannot arbitrarily allocate a value but must rely on evidence to establish any value difference between properties. Based on the evidence received, I find that the Sale B property is similar to the subject property.

21Mr. Yao also argued that the Sale B property (with an actual sale price of $880,000 on November 30, 2015) should not require a time adjustment as the sale date is very close to the valuation day of January 1, 2016. I agree.

22Furthermore, I find that the Sales C, D and E properties are similar to the subject property. The lots are slightly larger and the buildings are slightly smaller.

23As a result, I find that the current value of the subject property would likely fall in the range of the four similar sales B, C, D, and E: $880,000, $895,917, $896,071 and $914,857.

24Because these sales properties are similar to the subject, I have looked to the sale value per square foot of building area. I note that the average sale price per square foot of building area for the Sales B, C, D and E properties is $322.71, which, applied to the subject property’s building area results in a value of $949,090 or $949,000, rounded.

25I find that the best determination of current value is the average sale price per square foot of building area of the four sales. I have used the average instead of MPAC’s method of using the median because the sample size is quite small. Accordingly, I find the current value to be $949,000 for the 2017 and 2018 taxation years.

EQUITY

26The 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, the current value should be adjusted to make it equitable, as required by s. 44.(3)(b) of the Act.

27For the purpose of establishing equity, properties do not need to be comparable however they need to be of a similar nature and within a reasonable proximity to the subject property.

28MPAC submitted an equity analysis report which looked at the level of assessment of 30 residential properties that sold within 2 kilometres of the subject property. In her assessment to sale ratio ("ASR") analysis, MPAC’s sales sample produced a median ASR of 0.915, indicating that similar properties in the vicinity are assessed at values that are lower than their sale prices and that an adjustment is warranted.

29Mr. Yao requested that the assessment be reduced by 10% because he believes his property is assessed too high. When asked what he relies upon to support of this amount he identified the Sale to Assessment Ratio of 0.90 for 3884 Bloomington Crescent from MPAC’s Sales Used in Price Change Over Time Analysis. He did not identify 3884 Bloomington Crescent as a similar property to his or whether it is located near his property. He argued that it reflects the value by which his property is over-assessed.

30The assessment to sale ratio is a test of whether MPAC’s model is statistically sound, in this case, for residential properties in the vicinity of the subject property. I prefer the larger sample provided by MPAC because it likely gives a more accurate picture of whether the model is working well.

31Accordingly, I have applied the 0.915 ASR to the subject property’s current value of $949,000 which results in a reduced value of $868,335 or $868,000, rounded to make the assessment equitable.

CONCLUSION

32The Board finds that the current value of the subject property, as of the January 1, 2016 valuation day, is $949,000 for the 2017 and 2018 taxation years. The Board also 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 to $868,000

33Accordingly, for the 2017 and 2018 taxation years, the assessment is reduced from $877,000 to $868,000.

2018 DEEMED APPEAL

34An appeal for the 2017 taxation year is presently before the Board. Section 40.(26) of the Assessment Act provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

35Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.