Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: August 7, 2018

FILE NO.: WR 154292

Assessed Person(s): Richard Achille Anisio

Appellant(s): Richard Anisio

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 239 Hillhurst Boulevard

Municipality(ies): City of Toronto

Roll Number(s): 1908-061-030-00900-0000

Appeal Number(s): 3266013 and 3295291

Taxation Year(s): 2017 and 2018

Hearing Event No.: 701373

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

Heard: July 10, 2018 by telephone conference call

APPEARANCES:

Parties	Representative
Richard Achille Anisio	Jill Bender
MPAC	Cherie Lee Matthew
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY MARCELLE BOURASSA

INTRODUCTION

1Richard Achille Anisio (the “Appellant”) is the owner of a two-storey residential dwelling located at 239 Hillhurst Boulevard (the “subject property”) in the City of Toronto. The dwelling has 2,594 square feet (sq. ft.) of building area and 825 sq. ft. of finished basement area. It was built in 1962 and has been assigned a quality of construction rating of 6.0. It has an attached garage and is located on an effective site area of 6,750 sq. ft.

2For the 2017 and 2018 taxation years under appeal, MPAC returned the assessment for the subject property at $1,702,000.

3The Appellant appealed the assessment for the 2017 and 2018 taxation years to the Assessment Review Board (“Board”). Jill Bender, the Appellant’s representative, states that the subject property is assessed too high. It is her position that the subject property’s current value is $1,414,000.

4Pursuant to the Assessment Act (“Act”), the burden of proof as to the correctness of the current value of the subject property rests with MPAC. For the period of 2017-2020, the subject property is valued as of January 1, 2016. MPAC’s representative, Cherie Lee Matthew, estimates the current value of the subject property to be $1,708,000 based on the direct comparison approach.

5Ms. Matthew conducted an equity study and determined that an equitable reduction is not required. She concludes that the assessment should be confirmed at $1,702,000 for the 2017 and 2018 taxation years.

6Ms. Bender takes the position that subject property is inequitably assessed in relation to similar properties and should be assessed at $1,315,000.

ISSUES

7The issues to be determined are:

a) What is the correct current value of the subject 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

8The Board finds that the current value of the subject property, as of the January 1, 2016 valuation date, is $1,517,000 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.

9The assessment of the property located at 239 Hillhurst Boulevard is reduced from $1,702,000 to $1,517,000 for the 2017 and the 2018 taxation years.

RELEVANT LEGISLATION

10Section 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.

11Section 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.

12Section 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 the period consisting of the four taxation years from 2013 to 2016, land is valued as of January 1, 2012.

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

13Section 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.

14Section 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 and Submissions

15Ms. Matthew relies on a Valuation Report that includes a Sales Ratio Trend Analysis (“SRTA”) study based on 259 sales of vacant and/or improved land from the subject property’s neighbourhood and adjacent areas from January 6, 2015 to December 30, 2016. According to the SRTA study, the overall change in the market was 42.01%. The SRTA study determined computer generated time adjustment factors (“TAFs”) used to adjust sales to the valuation date. Details for the 259 sales included in the study were included in the Valuation Report.

16Key property details for the proposed comparable properties presented by MPAC are set out below. All of the properties are located on the east side of Bathurst Street in homogenous area C40.

Property	Effective Site Area (sq. ft.)	Year Built (effective)	Quality	Blg Area (sq. ft.)	Other	Sale (Time Adjusted Sale “TAS”)
239 Hillhurst Boulevard (subject property)	6,750	1962	6.0	2,594	Attached garage	N/A
248 Hillhurst Boulevard Sale 1)	6,700	1952	6.0	1,777	-4% for proximity to multi-res Attached garage	1,850,000 (1,708,185) (06/30/2016)
160 Cortleigh boulevard (Sale 2)	6,700	1940 (1998)	6.5	2,176	B reno (2013) B reno (1990) Attached garage	2,300,880 (2,154,531) (05/16/2016)
58 Alexandra Wood (Sale 3)	6,100	1950	6.0	1,685		1,635,000 (1,647,433) (12/8/2015)

17Ms. Matthew states that the subject property has an easement on one side of the property. The area was used for water drainage but has now been filled in. However, it cannot be built on. The area is not accounted for in the effective site area.

18Ms. Matthew opines that the Appellant’s comparable property located at 348 Hillhurst Boulevard should be excluded as the sale occurred in December 2014 that is outside the 2015 shoulder year to the January 1, 2016 valuation date.

19Ms. Matthew also states that MPAC’s records show that for 300 Hillhurst Boulevard, many deficiencies were noted including leaks and cracked walls as a result of an inspection, making it an inferior property. Ms. Matthew opines that due to its condition, she does not consider it as a comparable property to the subject property.

20Ms. Matthew estimates the current value of the subject property, based on the median time adjusted sale price for the three comparables, is $1,708,000.

Appellant’s Evidence and Submissions

21Ms. Bender relies on the sales of six proposed comparable properties. They are located on Hillhurst Boulevard but west of Bathurst Street, in a different homogenous neighbourhood than the subject property. Ms. Bender states that she resides in the area and expressed the opinion that there is no significant difference in location along Hillhurst Boulevard as between the east and west side of Bathurst. It is a desirable street in the Forest Hill neighbourhood.

22Key property details for the proposed comparable properties provided by Ms. Bender are set out below. Ms. Bender states that the properties are similar to the subject property in terms of location, site area, building area and year of build. Ms. Bender states that sales prices have been adjusted by a rate of 1% per month, which is their standard adjustment used based on the Toronto market for the current CVA cycle. She asserts that residential value in Toronto increased by 12% between 2015 and 2016 but did not provide any back up documentation at the hearing. Ms. Matthew provided property details including quality of construction rating and year and type of renovation based on MPAC’s records.

Property	Actual Site Area (sq. ft.)	Year Built (effective)	Quality	Blg Area (sq. ft.)	Other	Sale (Time Adjusted Sale “TAS”) ($)	2016 CVA
239 Hillhurst Boulevard (subject property)	8,117.85	1962	6.0	2,594			1,702,000
348 Hillhurst Boulevard Sale 1)	8,647.77	1958 (2004)	7.0	2,235	C reno (2013)	1,700,0001 (1,921,000) (12/2014)	1,581,000
300 Hillhurst Boulevard (Sale 2)	6,250	1955	6.5	2,480		1,065,000 (1,087,000) (11/2015)	918,000
351 Hillhurst Boulevard (Sale 3)	6,223	1957	6.5	3,092		1,905,000 (1,734,000) (10/2016)	1,189,000
311 Hillhurst Boulevard (Sale 4)	7,552	1956	6.5	2,914		1,625,000 (1,512,000) (08/2016)	1,241,000
307 Hillhurst Boulevard (sale 5)	6.400	(2011)	7.5	2,024	D reno (2014)	2,250,000 (2,093.000) (08/2016)	1,579,000
292 Hillhurst Boulevard (sale 6)	6,250	1955 (1975)	6.5	2,694	C reno (1978)	1,585,000 (1,427,000) (11/2016)	1,125,000

23Ms. Bender states that the median total building area is 2,587 sq. ft. and the median TAS value per sq. ft. is $545. Applying the value of $545 per sq. ft. to the subject property’s building area of 2,594 sq. ft. results in a value of $1,414,000 (rounded).

24Ms. Bender states that she excluded the property at 248 Hillhurst Boulevard from her analysis as the building area is 817 sq. ft. smaller than that of the subject property.

25Ms. Bender estimates the current value of the subject property is $1,414,000.

Board’s Analysis and Findings

26Under 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 subject property on the valuation date or close to it.

27If, 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.

28To 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.

29The Board has considered the proposed comparable properties with sales in evidence including the Appellant’s properties located on Hillhurst Boulevard on the west side of Bathurst. Ms. Matthew states that the Appellant’s proposed comparable properties are located in a different homogenous area than the subject property. The Board accepts Ms. Bender’s evidence that there is no significant difference in location along Hillhurst Boulevard as between the east and west side of Bathurst. Hillhurst Boulevard is a desirable street address in the exclusive Forest Hill neighbourhood.

30The Board has a number of proposed sales comparables to consider that occurred in either shoulder year to the legislated January 1, 2016 valuation date. The Board calculated time adjusted sale values for each property using both MPAC’s TAFs and the Appellant’s proposed adjustment at a rate of 1% per month. The Board found MPAC’s time adjusted sales values to be lower. The Board has taken into account that MPAC’s evidence included details for the 259 sales included in the SRTA study that determined the TAFs used to adjust sales to the valuation date. Ms. Bender did not provide any back up documentation in support of the proposed adjustment at a rate of 1% per month at the hearing. Accordingly, the Board used MPAC’s TAFs in adjusting the Appellant’s proposed sales comparables to the January 1, 2016 valuation date.

31The Board has not considered the property at 300 Hillhurst Boulevard as it does not find it comparable to the subject property given the evidence of its structural deficiencies that makes it inferior.

32The Board has not considered the property at 348 Hillhurst Boulevard as it finds the December 2014 sale too far removed from the January 1, 2016 valuation date. In addition, there was no TAF available to adjust the December 2014 sale price. Even if there had been a TAF available, the Board finds that evidence suggests that 348 Hillhurst Boulevard is a superior property to the subject property due to its larger actual site area, a higher quality of construction rating of 7.0, its renovated condition and effective year of build of 2004.

33The property at 248 Hillhurst Boulevard is comparable to the subject property in terms of effective site area and quality of construction. However, it is older having a year of built of 1952 and a much smaller building area (1,777 sq. ft. versus 2,594 sq. ft. for the subject property). It also receives a negative 4% adjustment for proximity to a multi-residential property. Therefore, the Board finds the property at 248 Hillhurst Boulevard to be inferior to the subject property.

34The property at 58 Alexandra Boulevard is comparable to the subject property in terms of effective site area and quality of construction. However, it is older having a year of built of 1950 and a much smaller building area (1,685 sq. ft. versus 2,594 sq. ft. for the subject property). Therefore, the Board finds the property at 248 Hillhurst Boulevard to be inferior to the subject property.

35The property at 160 Cortleigh Boulevard is comparable to the subject property is terms of effective site area. It has a smaller building area than the subject property at 2,176 sq. ft. However, it is newer with an effective year of build of 1990 having undergone a renovation in 2013 and has a slightly higher quality of construction rating of 6.5. Therefore, the Board finds the property at 160 Cortleigh Boulevard to be superior to the subject property.

36The property at 351 Hillhurst Boulevard has an actual site area that is smaller than the subject property’s effective site area. It is also five years older. However, it has a slightly higher quality of construction rating of 6.5 and a larger total building area of 3,092 sq. ft. (versus 2,594 sq. ft. for the subject property). It had a TAS of $1,666,875 using MPAC’s TAF. The Board finds the property at 351 Hillhurst Boulevard to be reasonably comparable to the subject property.

37The property at 311 Hillhurst Boulevard has an actual site area that is larger than the subject property’s effective site area. It is six years older but has a slightly higher quality of construction rating of 6.5. It also has a larger total building area of 2,914 sq. ft. (versus 2,594 sq. ft. for the subject property). It has a TAS of $1,459,250 using MPAC’s TAF). The Board finds the property at 311 Hillhurst Boulevard to be reasonably comparable to the subject property.

38The property at 307 Hillhurst Boulevard has an actual site area that is smaller than the subject property’s effective site area. It also has a smaller building area than the subject property at 2,024 sq. ft. However, it is newer with an effective year of build of 2011 having undergone a substantial “D” renovation in 2014 and has a much higher quality of construction rating of 7.5. It has a TAS of $2,020,500 using MPAC’s TAF. Therefore, the Board finds the property at 307 Hillhurst Boulevard to be superior to the subject property.

39The property at 292 Hillhurst Boulevard has an actual site area that is smaller than the subject property’s effective site area. However, it is newer with an effective year of build of 1975 having undergone a “C” renovation in 1978 and a slightly higher quality of construction rating of 6.5. It also has a slightly larger total building area of 2,694 sq. ft. (versus 2,594 sq. ft. for the subject property). It has a TAS of $1,367,855 using MPAC’s TAF. The Board finds the property at 292 Hillhurst Boulevard to be reasonably comparable to the subject property.

40The Board finds the properties located at 351, 311 and 292 Hillhurst Boulevard to be the most comparable properties to the subject property. They have time adjusted sales values that range from $1,367,855 to $1,666,875. Therefore, the Board finds that the subject property’s current value is likely at the midpoint of the range, at $1,517,365 or $1,517,000 (rounded).

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 and Submissions

41Ms. Matthew relies on an Equity Analysis Report that considered the time adjusted sales of 30 properties, Single Family Detached (Not on Water) properties, that occurred between January 1, 2015 and December 31, 2016 within 0.95 kilometres of the subject property.

42In her Report, Ms. Matthew 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 1.005 indicates that similar properties in the vicinity have been assessed at or near their current values. An equity adjustment is not required.

43Ms. Matthew concludes that the assessment for the subject property should be confirmed at $1,702,000 for the 2017 and 2018 taxation years.

Appellant’s Evidence and Submissions

44Ms. Bender takes the position that subject property is inequitably assessed in relation to similar properties. She relies on a Time Adjusted Equity Study of 30 residential properties. The study includes mostly single family detached residential properties. However, it also includes one semi-detached property and two residential condominium units. The properties are located within 0.44 kilometres of the subject property and had sales within a range of $900,000 to $2,600,000. The sales occurred in 2015 and 2016 and the sale prices have been time adjusted by a rate of 1% per month. The resulting median ASR is 0.93.

45Applying the median ASR of 0.93 to the property’s estimated current value of $1,414,000 results in an equitable value of $1,315,000.

46Ms. Bender concludes that the assessment for the subject property should be reduced from $1,702,000 to $1,315,000 for the 2017 and 2018 taxation years.

Board’s Analysis and Findings

47Section 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.”

48The 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.

49In 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].”

50The 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).

51The 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.

52The 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.

53Ms. Matthew relies on an Equity Analysis Report that considered the time adjusted sales of 30 properties, Single Family Detached properties that occurred between January 1, 2015 and December 31, 2016, within 0.95 kilometres of the subject property. In this this instance, the sales sample produced a median ASR of 1.005 that indicates that similar properties in the vicinity have been assessed at or near their current values.

54Ms. Bender relies on a Time Adjusted Equity Study of 30 residential properties that are located within 0.44 kilometres of the subject property. The resulting median ASR is 0.93 and Ms. Bender submits that it supports an equity adjustment. The Board rejects the study for several reasons. It includes two residential condominium units that should be excluded. The sales of the remaining properties occurred in 2015 and 2016 and the sale prices have been time adjusted by a rate of 1% per month. As noted above, Ms. Bender did not provide any back up documentation in support of the adjustment at a rate of 1% per month at the hearing. Unfortunately, the original sale prices for most of the properties included in the study are not available. Therefore, the Board was unable to determine TAS sales values for the properties and a corresponding ASR.

55Therefore, for all of these reasons, the Board prefers MPAC’s Equity Analysis Report and finds that the evidence before it does not support the conclusion that an equity adjustment is required.

CONCLUSION

56The Board finds that the current value of the subject property, as of the January 1, 2016 valuation date, is $1,517,000 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.

57The assessment of the property located at 239 Hillhurst Boulevard is reduced from $1,702,000 to $1,517,000 for the 2017 and the 2018 taxation years.