Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: February 23, 2018 FILE NO.: WR 150442

Assessed Person(s): Sandra Lynn Mulvihill Appellant(s): Sandi Mulvihill, John Mulvihill Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 7 Respondent(s): Township of Selwyn

Property Location(s): 409 Gifford Drive Municipality(ies): Township of Selwyn Roll Number(s): 1516-010-002-17800-0000 Appeal Number(s): 3202583 Taxation Year(s): 2017 Hearing Event No. 692464

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

Heard: December 7, 2017 by telephone conference call

APPEARANCES:

Parties	Representative
John Mulvihill	Self-represented
MPAC	Billy Nolan
Township of Selwyn	No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1In a previous assessment cycle, Mr. Mulvihill the Appellant was successful in obtaining a reduction in current value, based on an adjustment for the purposes of equitable assessment. He believes that nothing has changed since that time and, accordingly, he should be afforded the same adjustment for the 2017 tax year, based on the current value of the subject property as of January 1, 2016.

2MPAC disagrees with Mr. Mulvihill’s position and believes that this appeal ought to be considered as a new appeal, under the most recent valuation day of January 1, 2016 which applies to the 2017 tax year.

3The Board must decide two things in this appeal. Firstly, the current value of the subject property must be determined for the 2017 taxation year, based on the evidence at the hearing. Having reference to the assessments of similar properties in the vicinity, the Board must also determine if the current value found, needs to be reduced for the purpose of equitable assessment.

DECISION

4The Board finds that the current value of the subject property for the 2017 taxation year is $689,000. The Board also finds that, there is no evidence to suggest a reduction of this value is necessary to achieve equitable assessment.

5Accordingly, the assessment of the subject property, for the 2017 taxation year is reduced from $697,000 to $689,000 in the Residential property class.

LEGISLATION

6In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (“Act”).

7Section 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.

8Section 19.(1) of the Act states:

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

9Section 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.

What is the Current Value of the Subject Property?

MPAC’S Evidence and Position:

10Mr. Nolan carried out a valuation of the subject property using the direct comparison approach to value, whereby similar properties in the area that have sold in proximity to the statutory valuation day are used to approximate the current value of the property under appeal. Differences in characteristics between the comparable properties and the subject property are considered and appropriate adjustments to value are made to arrive at a value that is considered reasonable.

11Because market conditions and sale prices change over time, and because the comparable properties were not sold on the valuation day of January 1, 2016, Time Adjustment Factors (“TAF”) are applied to adjust the sale value of each of the comparable properties to show their likely sale value as if they were sold on January 1, 2016. The TAFs in this case are derived from 265 sales of residential properties in the market area, between January 2015 and December 2016. By plotting these 265 sales, MPAC is able to assign a TAF that represents the adjustment in value necessary to reflect the change in a specific sale price so that it can be compared with the subject property and other sales as though they all sold on the statutory valuation day of January 1, 2016.

12Mr. Nolan used the sales of three properties in his analysis that he found to be the most comparable to the subject property. The range of the Time Adjusted Sale (“TAS”) values of these three comparables is $688,671 to $1,021,411. He submitted that the most realistic value range is $688,671 to $733,749 which excludes the higher value property at 173 Gifford Drive, and that based on these two most similar properties, the returned value of $697,000 is reasonable and correct. The details of the characteristics of Mr. Nolan’s comparable properties are summarized in Table A.

TABLE A

	Subject Property 409 Gifford Drive	Sale 1 461 Gifford Drive	Sale 2 287 Arnott Drive	Sale 3 173 Gifford Drive
Lot Area (acres)	0.29	0.51	0.55	0.61
Lot frontage	125 feet	101 feet	125 feet	108 feet
Living Area (sq. ft.)	2,633	2,384	2,194	3,398
Quality of ConstructionRating	7	7	7	7
Sale Price ($)/Date	N/A	$765,000/June 2016	$750,000/ December 2016	$970,000/June 2015
TAS Price ($)	N/A	$733,749	$688,671	$1,021,411
2016 CVA ($)	$697,000	$723,000	$676,000	$860,000
Year Built	1993	2003	2016	2001
Secondary Structures	Attached Garage	Detached Garage; Carport; Attached Garage	Detached Garage	Detached Garage

Appellant’s Evidence and Position:

13Mr. Mulvihill disagreed that the three properties used by MPAC are appropriate comparables and that they reflect a current value of the subject property that is too high. He did not lead any current value evidence of his own, but submitted that when the returned value of the subject property is compared to the assessment of a property at 299 Gifford Drive, the assessment of the subject property should be reduced for it to be equitable.

Board’s Analysis:

14When reviewing the comparable properties used by MPAC, the Board finds that the most comparable is Sale 2 at 287 Arnott Drive. Compared to the subject property, this property has similar lake frontage, a larger lot, a smaller (but 13 years newer) building with a detached garage structure.

15The Board further finds that when these differences are combined, they tend to cancel one another out, with the effect that the building size is offset by the difference in age and by the lot area. Accordingly, the current value of the subject property is best reflected by Sale 2. The current value of the subject property is equivalent to the TAS value of Sale 2, being $689,000 (rounded).

Is a reduction in the current value necessary to achieve equitable assessment when reference is made to the assessments of similar properties in the vicinity?

Appellant’s Evidence and Position:

16Mr. Mulvihill indicated that he made similar arguments of equity in past years. For the 2008 current value assessment (“CVA”), the Board found in his favour and reduced the assessment based on a comparison with the property at 299 Gifford Drive. For the 2012 CVA, he successfully made the same argument and was able to have his assessment reduced from $545,000 to $529,250 (2013 phase-in value) through the Request for Reconsideration (“RfR”) process with MPAC.

17For the 2016 CVA, Mr. Mulvihill submitted that the assessment of 299 Gifford is $624,000, that the CVA per square foot of 299 Gifford is $256.68 and when that value is applied to the subject property’s 2,633 square feet, the resulting value is $676,000 (rounded). He believes this value reflects an equiatable assessment of the subject property.

18Mr. Mulvihill stressed that the 299 Gifford property has less waterfront, but that it is similar to the subject property when the muddy waterfront area of the subject property is considered. He also submitted that the larger lot area of 299 Gifford is an advantage when the prospect of new septic tile systems are considered. He submitted that the area of the subject property would represent a challenge with respect to locating a replacement septic system. Mr. Mulvihill, however, did not submit any quantatative evidence of what difference this impact would make to the property’s value.

MPAC’s Evidence and Position:

19Mr. Nolan submitted an equity study that included the TAS values of 47 properties in the vicinity of the subject property, and the 2016 CVA of these 47 properties. All 47 properties are within five km of the subject property and are waterfront properties. The comparison of these assessments to sale values is called the Assessment to Sale Ratio (“ASR”). Mr. Nolan submitted that the range of ASRs in his sample was from 0.704 to 1.342, with a median of 0.979. He explained that this is a statistical exercise to make a determination of equity of assessment. As a result, two parameters are used to confirm that the findings are not erroneous. The first is the co-efficient of dispersion (“CoD”), which is the average difference between any one ASR and the resultant, median ASR in the study. The lower the CoD, the more accurate the findings of the study are considered. In this case the CoD is 10.4 which is considered to conform to the International Asociation of Assessing Officers’ (“IAAO”) suggested maximum of 15.

20The second parameter used to test the reliability of the equity analysis is the proximity of the median ASR to 1.00. The subject study indicates that the median ASR of the 47 properties in the study is 0.979, meaning that generally speaking, properties that are similar to the subject property, in the same vicinity are assessed at approximately 98% of their current value as determined through sales. Mr. Nolan submitted that a median ASR that is anywhere between 0.95 and 1.05 (as indicated by the IAAO and MPAC) suggests that properties are generally assessed at their current value, and that there is no requirement to reduce the current value determined to make the assessment equitable.

Board’s Analysis:

21The concept of reducing the current value determined to make the subject property’s assessment equitable with that of similar properties in the vicinity requires the Board to change a correct assessment finding to one that is incorrect to make it fair and equitable. Adjustments for this purpose cannot therefore be made without compelling evidence to do so. Mr. Mulvihill’s case focused entirely on the equity of the returned value of the subject property as compared to the assessment of a single property at 299 Gifford Drive.

22In contrast, Mr. Nolan prepared an equity study that compared the TAS values of 47 waterfront residential properties to their 2016 CVA. These 47 properties were all in the vicinity of the subject property.

23I find that the best evidence of equitable assessment is that of Mr. Nolan. His equity study concludes that the subject property does not require a downward adjustment to the subject property’s assessment for it to be equitable. This conclusion is supported by the data in the study which conforms to the standards of the IAAO and MPAC. These findings were not refuted by Mr. Mulvihill.

24Mr. Mulvihill’s comparsion to the property at 299 Gifford Drive fails to adequately reconcile the one major factor in the difference of assessment between it and the subject property; that being age. The subject property is 44 years newer than the 299 Gifford property. This vast difference was not meaningfully accounted for in Mr. Mulvihill’s comparison. In addition, an analysis that uses one property cannot reasonably be used for an equity finding when there is a comparsion with the subject property to 47 properties in evidence, as Mr. Nolan submitted in this case.

25The Board finds that there is no evidence that would suggest a reduction of the current value determined is necessary for the assessment of the subject property to be equitable, when reference is made to the assessments of similar properties in the vicinity.

CONCLUSION

26The current value of the subject property is $689,000. There is no evidence to suggest a reduction in this amount is necessary for the purposes of equitable assessment.

27Accordingly, the assessment of 409 Gifford Drive is reduced for the 2017 taxation year from $697,000 to $689,000, in the Residential property class.