Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 27, 2018

FILE NO.: WR 153144

Assessed Person: Luc Ernest Begin

Appellants: Luc Begin, Lucienne Bahuaud

Respondent: Municipal Property Assessment Corporation (“MPAC”) Region 03

Respondent: City of Ottawa

Property Location: 1319 Turner Crescent

Municipality: City of Ottawa

Roll Number: 0614-500-302-11300-0000

Appeal Numbers: 3259804 and 3291148

Taxation Years: 2017 and 2018

Hearing Event No. 696873

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

Heard: May 04, 2018 in Ottawa, Ontario

APPEARANCES:

Parties	Representative
Luc Begin	Self-represented
MPAC	Caroline Sauve
City of Ottawa	No one appeared

DECISION OF THE BOARD DELIVERED BY SCOTT McANSH

1Luc Begin appealed the assessment of his property because he felt the assessment was too high. His property is located at 1319 Turner Crescent in the City of Ottawa and was assessed at $475,000 for the 2017 taxation year. The first step in contesting any residential assessment is to file a request for reconsideration with MPAC. Through that process Mr. Begin provided information about his home to MPAC and MPAC responded by increasing the assessment of his home to $512,000 for the 2018 taxation year. That increase was based on renovations that Mr. Begin had made to his home, including new windows, new shingles, and a new furnace.

2At the hearing before me MPAC took the position that the proper assessment of the property for both taxation years is $478,000. Mr. Begin submits that the true current value is something less than that, based primarily on his view that all homes in this 30 year old subdivision have likely had the same improvements as his.

3For the reasons that follow I find that the property likely would have sold for $445,000 on January 1, 2016. There is no evidence that it would be unfair or inequitable to assess the property at that value. I therefore reduce the 2017 taxation year assessment from $475,000 to $445,000 and I reduce the 2018 taxation year assessment from $512,000 to $445,000.

Legislation

4Clause 44(3)(a) of the Assessment Act (“Act”) requires this Assessment Review Board (“Board”) to “determine the current value of the land.” Current value is defined in section 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 relevant valuation day, set pursuant to section 19.3 of the Act, as January 1, 2016 for the 2017 and 2018 taxation years.

5Once I have determined the current value, clause 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.

Current Value

6Mr. Begin’s property is a 2,494 square foot, two- storey brick house built in 1983 in the Queenswood Heights neighbourhood of the Orleans region of the City of Ottawa. It has an attached garage and a swimming pool. There have been a few improvements to the property over the years, including new windows in 1998, a new furnace in 2006, new shingles on the roof in 2011, new toilets in 2011, and a cosmetic upgrade to the kitchen in 2011. MPAC took an average of those changes and coded them collectively as a “B” renovation conducted in 2005. That change by MPAC made the “effective year built” of the property 1997.

7It was on that modified effective age that MPAC claims that Mr. Begin’s property cannot fairly be compared to properties in the neighbourhood that do not have a renovation recorded in MPAC’s file. MPAC acknowledges that its records are not entirely accurate in Queenswood Heights and that it needs to inspect the homes in that area. But it stands by its assessment of the property, based on Mr. Begin’s self-reporting, and therefore also stands behind its opinion that the property likely would have sold for $478,000 on January 1, 2016.

8Mr. Begin’s position is that the concept of “effective age” is an arbitrary fiction created by MPAC and ought not be relied upon. He also says that it is not believable that properties in his neighbourhood have the original windows, or shingles, or furnace, that they had 33 years ago, when they were built. He argues that a renovation must be something more than that form of necessary maintenance.

9The issue is apparent in the sales. There were many sales of two storey homes built in the same time period as Mr. Begin’s in 2015 and 2016. Mr. Begin objected to MPAC’s inclusion of sales that took place after the January 1, 2016 valuation day. It does not matter whether a sale took place before or after January 1, 2016. Sales are a better indication of how the market would have treated Mr. Begin’s property the closer they are in time to January 1, 2016. I have therefore excluded those few sales presented the sold more than a year from the valuation day.

10The parties put many sales before me. I have summarized the sales that took place in 2015 and 2016 here:

	Address	House Size	Lot Size	Year Built	Effective Age	Sale Date	Sale Price
	1319 Turner Cres.	2,494	0.14	1983	1997
1	353 River Ridge Cres.	2,568	0.14	1983	2000	June 2016	$585,000
2	1333 Turner Cres.	2,665	0.14	1983	2001	Aug. 2016	$560,000
3	1494 Bourcier Dr.	2,841	0.15	1986	2000	July 2016	$544,000
4	1414 Bourcier Dr.	2,494	0.14	1984	1984	Oct. 2015	$430,000
5	1402 Bourcier Dr.	2,494	0.14	1984	1984	Aug. 2015	$442,000
6	1996 Legrand Cres.	2,494	0.12	1987	1987	June 2016	$450,000
7	1284 Turner Cres.	2,602	0.15	1985		July 2015	$472,000
8	1354 Turner Cres.	2,494	0.14	1983		May 2015	$430,000
9	1037 Deauville Cres.	2,442	0.15	1984		May 2016	$467,500
10	1318 Turner Cres.	2,386	0.15	1983		Aug. 2016	$545,000

11Mr. Begin personally visited every property in evidence and states that Sales 1, 2, and 10 all back onto a ravine and have views of the Gatineau hills. He argues that those features add value to those properties, making them less comparable to his property. MPAC did not contest the fact that those properties abut a ravine, but suggested that they are still comparable. Those properties sold for between $545,000 and $585,000, nearly $100,000 more than most of the others. That indicates to me that those sites attract higher values and are not the best comparisons. I exclude Sales 1, 2, and 10 from direct comparison to Mr. Begin’s property.

12The only other property with a sales price over $500,000 is Sale 3. Mr. Begin argued that Sale 3 was a custom home in a more generic subdivision development. It has six bathrooms, including an ensuite in each bedroom, and other amenities not common to the neighbourhood. I agree that this property is not the most comparable to Mr. Begin’s property. There are sales available of properties that are much more similar to Mr. Begin’s and I therefore do not need to consider what Sale 3 indicates about the likely sale price of Mr. Begin’s property.

13The exclusion of those four sales leaves six sales to consider in determining the likely sale price of Mr. Begin’s property on January 1, 2016: Sales 4, 5, 6, 7, 8, and 9. Mr. Begin visited each of those sites and saw that they had replaced at least some windows and had new shingles. MPAC does not have a renovation recorded on any of the properties and says that they are not comparable because Mr. Begin’s property has been renovated. I agree with Mr. Begin that it is highly unlikely that these comparable sales have not had at least the same level of upkeep as his property. His evidence is that certain renovations have been made to these properties. Mr. Begin buttressed his personal evidence with real estate listings which showed that all of these properties had been updated with windows, roof updates and the like. I find that all six of these sales are very comparable to Mr. Begin’s.

14All of the remaining properties have the identical square footage, with the exception of Sale 7, which is only slightly larger. The mean sale price of all six of the remaining sales is $448,583, while the mean sales price of the five identically sized homes is $443,900. That evidence indicates that Mr. Begin’s home likely would have sold approximately $445,000 on January 1, 2016. I find that to be the current value of Mr. Begin’s property for the 2017 and 2018 taxation years.

Rate of Increase

15In addition to arguments about the likely sale price of his home, Mr. Begin complained that the assessment of his property has changed too much over time. I have no ability to adjust assessments based on the rate they have changed over time. Section 44.(3) sets out what I am to consider in these appeals, and it does not permit an investigation of changes over time. Each valuation day must be examined on its own, and markets change in unpredictable ways. It is possible that the likely sale price of a property could change substantially between valuation days. The only way to know is to look at particular sales around each valuation day. I only have sales around the January 1, 2016 valuation day, so can only determine the likely sale price on that date.

16The market will dictate the likely sale price of property on any given valuation day. The interaction between valuation days is not a relevant consideration in Ontario’s market based municipal taxation system.

Equity

17Once I have determined current value, clause 44.(3)(b) of the Act requires that I look at the assessments of similar lands in the vicinity and determine if it would be fair or equitable to assess this property at its current value. Section19.(1) of the Act states that all property is to be assessed at its current value. I may only assess Mr. Begin’s property below its current value with evidence that similar property in the vicinity is assessed below its current value. There is no such evidence here.

18MPAC entered a study of thirty properties in the vicinity that found that they were assessed, on average, at 97.5% of their sale price. That study shows that property is assessed close to its current value and it would therefore be fair to assess Mr. Begin’s property at its current value of $445,000.

Conclusion

19I find that the property at 1319 Turner Crescent has not been updated more than the average property in the area. The sale of similar properties indicates that the property likely would have sold for $445,000 on January 1, 2016. That is the current value of the property. There is no evidence that it would be unfair to assess the property at its current value. I therefore reduce the 2017 taxation year assessment from $475,000 to $445,000 and I reduce the 2018 taxation year assessment from $512,000 to $445,000.