Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: June 28, 2018

FILE NO.: WR 153742

Assessed Person(s): Joseph Thomas Canning, Josephine Rosina Canning

Appellant(s): Joseph Thomas Canning, Josephine Rosina Canning

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 15

Respondent(s): City of Brampton

Property Location(s): 8219 Heritage Road

Municipality(ies): City of Brampton

Roll Number(s): 2110-080-012-00300-0000

Appeal Number(s): 3254867 and 3307991 (deemed 2018 appeal)

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

Hearing Event No.: 688069

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

Heard: December 4, 2017 by telephone conference call

APPEARANCES:

Parties	Representative
Joseph Thomas Canning and Josephine Rosina Canning	Self-represented
MPAC	Leslie-Jane Hisey
City of Brampton	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1Joseph Thomas Canning and Josephine Rosina Canning (the “Appellants”) are the owners of a residential property located at 8219 Heritage Road in the City of Brampton. The dwelling has 2,948 square feet (“sq. ft.”) of building area and 765 sq. ft. of finished basement area. It was originally built in 1959, underwent a “D” renovation in 1989 and has an effective year of build of 1984. It is located on a site area of 2.41 acres. There is an outdoor pool.

2For the 2017 taxation year under appeal, MPAC returned the assessment for the property at $980,000.

3The Appellants appealed the assessment for the 2017 taxation year to the Assessment Review Board (“Board”). They take the position that MPAC’s assessment is too high. They did not specify an opinion of current value or an equitable assessed value. However, in their opinion, a value of $1,200,000 is not useful without a 20% discount. They would like consideration given to the fact that the Heritage Creek goes through their land, that approximately 50% of the subject property is conservation land, the presence of a 600 feet buffer that goes down as far as Steeles Avenue and covers the subject property, the anticipatory widening of Heritage Road and the level of traffic along Heritage Road. It is their further position that because of the restrictions the subject property would be difficult to sell. They are seeking a better consideration of the remaining subject property lands.

4Under the Assessment Act, R.S.O. 1990, c. A.31 (“Act”), the onus of proof as to the correctness of the current value of the property rests with MPAC. For the period consisting of the four taxation years from 2017 to 2020, a property is valued as of the legislated valuation date of January 1, 2016. MPAC’s representative, Leslie-Jane Hisey called Faissal Hussain as a witness. Mr. Hussain estimates the current value of the property to be $980,000, based on the direct comparison approach. Mr. Hussain also conducted an equity study. It is his position that an equitable reduction is not required. Ms. Hisey concludes that the assessment should be confirmed at $980,000 for the 2017 taxation year.

ISSUES

5The issues to be determined are:

a) What is the correct current value of the property as of the January 1, 2016 valuation date?

b) Whether there should be an equitable reduction of the current value as determined by the Board and, if so, what should the amount of this reduction be?

DECISION

6The Board finds that the current value of the property, as of the January 1, 2016 valuation date, is $971,000 under s. 44.(3)(a) of the Act. Furthermore, the Board finds that the evidence does not support the conclusion that the current value requires an equity adjustment under s. 44.(3)(b) of the Act.

7The assessment of the property located at 8219 Heritage Road is reduced from $980,000 to $971,000 for the 2017 and deemed 2018 taxation years.

RELEVANT LEGISLATION

8Section 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.

9Section 19.1(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

10Section 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.

11Section 40.(17) of the Act states:

40.(17) For 2009 and subsequent taxation years, where value is a ground of appeal, the burden of proof as to the correctness of the current value of the land rests with the assessment corporation.

12Section 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.

Analysis and Findings

What is the correct current value of the property as of the January 1, 2016 valuation date?

MPAC’S Evidence

13Ms. Hisey called Faissal Hussain as a witness.

14Mr. Hussain states that the subject property is located north of Steeles Avenue in the southwestern part of Brampton. It is an area in transition going from rural farmland or residential to a modern urban residential and business area.

15Mr. Hussain provided information on the subject property and the sales of five properties. Key points of comparison of the subject property and the five sales comparables are set out below. All five properties are located north of the subject property. Sales 2 to 5 are zoned agricultural like the subject property. Sale 1 is zoned residential.

Property	Effective Site Area (acres)	Year Built (effective)	Renovation	Quality	Building Area (sq. ft.)	Other	Variable Adjustment	Sale (TAS)$	$ per Acre
8219 Heritage Road (subject property)	2.41	1959 (1984)	D (1989)	6.5	2,948	Finished basement (765 sq. ft). Well Septic bed Pool	-1% Light traffic pattern	N/A
8768 Mississauga Road (Sale 1)	1.92	1960		6	1,946	Detached Garage	-2% Medium traffic pattern	997,630 (07/2016)	$519,603
8671 Heritage Road (Sale 2)	3.22	1963 (1992)	D (1998)	6.5	3,096	Finished basement (1,401 sq. ft).	-1% Light traffic pattern	1,387,438 (02/2015)	$430,881
8800 Heritage Road (Sale 3)	2.44	1950 (1988)	B (2001) Plus 971 sq. ft. Plus 860 sq. ft.	7.0	3,313	Finished basement (1,692 sq. ft).	-1% Light traffic pattern	1,520,611 (04/2016)	$623,201
8452 Heritage Road (Sale 4)	1.34	1955		6.5	1,352	Finished basement (432 sq.ft) Pool.	-1% Light traffic pattern	882,025 (07 2016)	$658,227
2573 Embleton Road (Sale 5)	1.92	1955		6	1,890	Detached Garage	N/A	704,704 (03/ 2015)	$367,033

16Mr. Hussain is of the opinion that Sales 2 and 3 located at 8671 and 8800 Heritage Road are most comparable properties to the subject property. They are located on the same road, have relatively similar living area and have been renovated like the subject property.

17Mr. Hussain states that he established a median value per acre of $519,603. Applying this value to the subject property results in a value of $1,252,000 (rounded).

18Mr. Hussain states that there is a creek that runs through the property and is a hindrance. However, he was of the opinion that it adds value as a buffer and a green space. He determined his opinion of value at $982,049. He applied the median Time Adjusted Sales (“TAS”) value per acre of $519,603 to 1.37 acres of tableland for a value of $711,856. He applied a 50% discount to the value per acre of $519,603 ($259,801.5) to account for the creek and green space and multiplied this value times the remaining 1.04 acres for an estimated current value of $982,049 or $982,000 (rounded).

19Mr. Hussain is of the opinion that the value of $982,000 supports the assessed value as returned at $980,000.

20Mr. Hussain states that the same issues arose in connection with a 2013 taxation year appeal. The previous assessor adjusted the total assessed value by 20% to $777,000 to account for the creek. He states that the 20% adjustment has been carried through to this assessment cycle. However, he is of the opinion that the current value should be $1,252,000.

21Mr. Hussain states that he is not aware of any conservation land classification on the subject property. He added that MPAC usually receives notice if there is conservation land. He added that an owner must apply to have the land classified as conservation land. There may be some conservation area.

Appellants’ Evidence

22The Appellants would like consideration given to the fact that the Heritage Creek goes through the middle of their land, that approximately 50% of the subject property is conservation land, the presence of a 600 feet buffer that goes down as far as Steeles Avenue and covers the subject property, a neighbour’s property and properties north of the subject property, the anticipatory widening of Heritage Road and the level of traffic.

23The Appellants submitted a map that shows the creek and outlines in red that portion of the subject property that they assert that the Conservation Authority controls and that they estimate is approximately 50%. The document was obtained by Mrs. Canning from the Conservation Authority in connection with the proposed road widening. They assert that this is what they have to show that part of the subject property was always conservation land. She confirmed that they did not make an application but bought their property the way it is.

24The Appellants assert that there is dumping of water from nearby commercial properties like Maple Lodge Farms that overflow the creek which was a pretty dry bed creek when they purchased the subject property 28 years ago. They assert that the Conservation Authority has designated 50% of the subject property as valley land. While it is nice to have a creek and conservation land, they assert that it limits what can be built on the subject property. The Appellants assert that they are responsible for maintaining this land and for paying taxes. They should receive some form of tax relief as owners.

25The Appellants assert there are restrictions and by-laws that limit the potential to develop the subject property and decrease the potential for sale. The Appellants submitted a drawing of their property that they assert indicates a 600 metre buffer zone that goes down as Steeles Avenue and limits what can be done with the subject property. They assert that it was put on at the request of Maple Lodge Farms and the City of Brampton approved it by by-law. It is also their belief that the subject property is now classified as prestige industrial.

26The Appellants assert that the level of traffic is definitely heavier, bumper to bumper, at certain times of the day.

27The Appellants assert that there is a building across from them, only 200 metres from their driveway, with over 1,000, 000 sq. ft., owned by Orlando Corporation and used by Amazon. They assert that there is a plan to build an extension to the building. The flow of trucks, day and night, is expected to increase.

28The Appellants also submitted a Notice of Study Completion dated November 16, 2017, of the completed Class Environmental Assessment for improvements to Heritage Road.

29The Appellants referenced a neighbouring property located south of the subject property at 8203 Heritage Road. They assert that this property is about the same size as the subject property and that conservation land cuts through the back of this property as opposed to going through the subject property. The Board asked MPAC for the property details and was advised that they could not access this information.

30The Appellants state that 8768 Mississauga Road is not a good comparable. It already has four lanes of traffic, about 200 feet of frontage and square acreage.

31The Board asked the Appellants what the subject property should be valued at. Mrs. Canning stated that she could not specify a value. She states that a value of $1,200,000 “is not useful” without a 20% discount. She asserts that because of the restrictions, the subject property would be difficult to sell. They are seeking a better consideration of the remaining subject property lands.

Board’s Analysis and Findings

32Under s. 44.(3)(a) of the Act, the Board must first determine the current value of the land. The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the property on the valuation date 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 legislated valuation date of January 1, 2016.

33The Board has considered the five properties with sales. To enable an estimate of value for the 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, etc. so as to enable a direct comparison to be made.

34The Board does not find sales 1, 4 and 5 to be comparable to the subject property. They have smaller site areas and building area and have much older dwellings than the subject property.

35The Board finds that the best comparables in evidence are the properties located at 8671 and 8800 Heritage Road (sales 2 and 3). They are located on the same road as the subject property and also subject to a negative 1% variable adjustment for light traffic. They have similar site areas with an average 2.83 acres (versus the subject property with 2.41 acres), have similar building areas with an average of 3,204 sq. ft. (versus the subject property at 2,948 sq. ft.) and some finished basement area. They have been renovated like the subject property although they are both slightly newer in terms of effective age than the subject property. Like the subject property, they are zoned agricultural. On this last point, the Appellants stated that it is their belief that the subject property is now classified as prestige industrial. However, the Board prefers Mr. Hussain’s evidence as to the zoning of the of the subject property as of the January 1, 2016 valuation date.

36The two sales comparables have an average TAS value of $1,454,024 and an average TAS value per acre of $513,789. Applying this value to the subject property’s 2.41 acres results in a value of $1,238,231.

37However, it appears from the evidence before the Board that neither 8671 nor 8800 Heritage Road have a creek, green space or conservation land. Mr. Hussain acknowledges that there is a creek that runs through the subject property and that it is a hindrance. However, he was of the opinion that it adds value as a buffer and a green space. He determined an opinion of value of $982,049. He also stated that a 20% adjustment has been carried through to this assessment cycle and that the assessment as returned of $980,000 reflects an adjustment for the creek.

38The Appellants assert that the Conservation Authority controls approximately 50% of the subject property. They submitted a map that shows the creek and outlines in red that portion of the subject property that they assert that the Conservation Authority controls and that they estimate is approximately 50%. The document was obtained by Mrs. Canning from the Conservation Authority in connection with the proposed widening of Heritage Road. The Appellants assert that this is what they have to show that part of the subject property has always been conservation land. Mr. Hussain stated that he is not aware of any conservation land classification on the subject property and that MPAC usually receives notice if there is conservation land. He added that an owner must apply to have the land classified as conservation land. Mrs. Canning confirmed that they did not make an application but bought their property the way it is.

39Based on the evidence before it, the Board finds that the subject property may include some conservation area but the exact site area is unclear as is whether it may be considered as conservation land. Nor is it known whether any area is eligible for inclusion as conservation land under the Conservation Land Tax Incentive Program (“CLTIP”). The CLTIP exempts eligible land from the payment of property tax and this appears to be the relief that the Appellants are seeking. However, it is up to the owners to apply to take part in the program and a completed application form must be submitted no later than July 31 to enroll for the following tax year.

40As noted above, applying the average TAS per acre of $513,789 to the subject property’s 2.41 acres results in a value of $1,238,231. Applying the 20% adjustment for the creek results in a value of $990,585. The Board compared this value to a value derived using Mr. Hussain’s approach. Applying the TAS value per acre of $513,789 to 1.37 acres of tableland results in a value of $703,890. Applying a 50% discount to the TAS value per acre of $513,789 ($256,894) to account for the creek and green space to the remaining 1.04 acres results in a value of $267,170. The combined value is $971,060.

41The Board will set the current value of the subject property at $971,000 (rounded).

42The Board finds that there is insufficient evidence to quantify the impact on current value of a 600 feet buffer that goes down as far as Steeles Avenue and covers the subject property, a neighbour’s property and properties north of the subject property,

43The Board’s authority is to determine the current value of the subject property as of the January 1, 2016 legislated valuation date. Therefore, it is unable to consider the impact on current value of an anticipatory widening of Heritage Road at some future point in time.

44The Appellants assert that the level of traffic is definitely heavier, bumper to bumper, at certain times of the day and will get worse. There is a negative 1% variable adjustment for traffic. The Board also finds that there is insufficient evidence to quantify any additional impact of traffic on current value.

45For all of these reasons, the Board sets the current value at $971,000.

Whether there should be an equitable reduction of the current value pursuant to s. 44.(3)(b) of the Act, and, if so, what should the amount of this reduction be.

MPAC’s Evidence

46Mr. Hussain relies on an Equity Analysis Report that considered the time adjusted sales of 30 properties that occurred between January 1, 2015 and December 31, 2016 all located within 3.53 kilometres of the subject property.

47In his report, Mr. Hussain states that the level of appraisal is established by determining the median Assessment to Sale Ratio (“ASR”) in the sales sample. He highlighted that, in this instance, the sales sample produced a median ASR of 0.998. 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 0.998 falls within an acceptable range.

48Therefore, he concludes that an equity adjustment is not required.

49Ms. Hisey concludes that the assessment for the subject property should be confirmed at $980,000 for the 2017 taxation year.

Appellants’ Evidence

50The Appellants did not specify an equitable assessed value.

Board’s Analysis and Findings

51Section 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.”

52The 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.

53In 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].”

54The 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).

55The 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 and character. 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.

56The 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.

57Mr. Hussain relies on an Equity Analysis Report that considered the time adjusted sales of 30 properties that occurred between January 1, 2015 and December 31, 2016 all located within 3.53 kilometres of the subject property. In this instance, the sales sample produced a median ASR of 0.998.

58The Board finds that the median ASR of 0.998 falls within MPAC’s generally acceptable standard of 0.95 and 1.05 and indicates that the level of current value assessments of similar properties is in line with the level of sales prices in the vicinity.

59For these reasons, the Board finds that the evidence before it does not support the conclusion that an equity adjustment is required under s. 44.(3)(b) of the Act.

CONCLUSION

60The Board finds that the current value of the property, as of the January 1, 2016 valuation date, is $971,000 under s. 44.(3)(a) of the Act. Furthermore, the Board finds that the evidence does not support the conclusion that the current value requires an equity adjustment under s. 44.(3)(b )of the Act.

61The assessment of the property located at 8219 Heritage Road is reduced from $980,000 to $971,000 for the 2017 and deemed 2018 taxation years.

2018 DEEMED APPEAL

62An appeal for the 2017 taxation year is presently before the Board. Section 40.(26) of the 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.

63Section 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.