Assessment Review Board

Commission de révision de l'évaluation foncière

ISSUE DATE: January 09, 2018 FILE NO.: WR 147842

Assessed Person(s): A. P. A. Applicant(s): A. P. A. Respondent(s): City of Toronto Property Location(s): Withheld Municipality(ies): City of Toronto Roll Number(s): Withheld Appeal Number(s): 3174256 Taxation Year(s): 2016 Hearing Event No.: 683966

Legislative Authority: Section 323. (1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A.

Heard: July 07, 2017 in Toronto, Ontario

APPEARANCES:

Parties	Counsel⁺/Representative
A. P. A.	V. S.
City of Toronto	Jennifer Boyczuk⁺ and Melanie Shankar

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI

INTRODUCTION

1The Applicant is a 90-year old woman who lives by herself in a 2-bedroom and 2-bathroom pent house condominium with a parking space.

2The Applicant filed this application with the City of Toronto (the "City") to have her 2016 property taxes refunded on the basis of sickness and extreme poverty pursuant to s. 323. (1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A. ("Act").

3With the Applicant's consent, her daughter V. S. acted as her representative.

ISSUE

4The issue before the Board is to determine whether the Applicant's property taxes for the 2016 taxation year should be refunded as a result of the Applicant's inability to pay due to sickness or extreme poverty.

DECISION

5The Applicant should not be granted a full or partial refund of the property taxes paid in the 2016 taxation year. The Board determines that the Applicant would have been able to pay her property taxes. The Board therefore, dismisses this application.

REASONS FOR DECISION

Legislation

6Section 323. (1)(e) of the Act provides:

Upon application to the city treasurer made in accordance with this section, the City may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(e) the applicant is unable to pay taxes because of sickness or extreme poverty;

7In making a determination in this application, the Board must first determine whether sickness or extreme poverty exists, which is the first part of the two-part test. If neither sickness nor extreme poverty exists, the Applicant would not qualify for relief. If either exists, to fulfill the second part of the test, the Applicant must demonstrate an inability to pay all or part of her property taxes.

EVIDENCE AND ANALYSIS

Sickness

8The Applicant did not claim or present the Board with any evidence regarding sickness. She stated that she is not basing her application on sickness but rather on extreme poverty. In this respect, the Board must then consider if the Applicant is unable to pay all or part of her taxes due to extreme poverty.

Extreme Poverty

9The term "extreme poverty" is not defined under the Act. In determining whether the Applicant is in a situation of extreme poverty, the Board has to consider the evidence presented by the Applicant regarding her financial situation, which is not limited to her income and expenses.

10The Applicant testified that she has two daughters who have been helping her financially. The Applicant testified that with the help of her two daughters she was able to pay her 2016 and 2017 property taxes. According to the Bank statements (Exhibit 3), the Board notes that the Applicant received cash advances of $17,950.00 on January 22, 2016 and $1,683.00 on May 11, 2016 with 11.99% interest rate and loaned it to her daughter for her business loss. The Applicant stated that her daughter paid both amounts back to her.

11The Applicant testified that the first mortgage of her property was paid by her deceased husband in 1997. However, later she applied for reverse mortgage but did not qualify.

12The Applicant testified that she owns a 1999 Toyota Corolla. She stated that she drives her car only to church and to her medical appointments and for the rest of her commuting she uses public transportation.

13The Applicant submitted a copy of the Form 1 – Financial Information (Exhibit 1), which shows her monthly income and expenses as detailed hereunder:

Income Ontario Trillium Benefit $ 104.14 Pension (CPP) $ 558.46 Ontario Old Age Security $1,128.00 Retirement $ 107.54 Survivor Benefit $ 457.62 Goods and Services Tax $ 26.00 Federal Government Rebate for Property Taxes ($500 for 2016) $ 41.67 Income Total $2,423.43/month

Expenses a. Property Taxes $ 223.00 b. Home/Auto Insurance $ 286.64 c. Condominium Fees $ 668.75 d. Telephone (land line) $ 44.02 e. Cell Phone $ 11.30 f. Cable $ 42.36 g. Groceries $ 200.00 h. Household Supplies $ 50.00 i. Transit/TTC $ 50.00 j. Car Repair/Maintenance $ 33.00 k. Gas $ 60.00 l. Credit Card $ 105.62 m. Sun Life Insurance $ 65.88 n. Clothing $ 25.00 o. Recreation/Entertainment $ 20.00 p. Cat Expenses $ 73.67 q. Gift to Family and Friends $ 32.50 Expenses Total $1,991.74/month

NET INCOME TOTAL $ +431.95/month

Assets Assessed value of the house in 2016 $ 389,000.00 Balance in the Chequing Account $ 100.84 Automobile $ 1,000.00 Assets Total $ 390,100.84

Liabilities Credit/Debit card(s) $ 353.68 Mortgage $ 119,320.00 Liabilities Total $ 119,673.68

NET WORTH TOTAL $ 270,510.00

14Based on the information submitted in the Form 1 – Financial Information (Exhibit 1), the net worth of the Applicant is $270,510.

City's Evidence and Position

15Melanie Shankar, representative for the City submits that the Applicant not only paid her 2016 property taxes but she also paid her 2017 taxes in full without any interest.

16Jennifer Boyczuk, Counsel for the City, submits that this application does not qualify as a case of extreme poverty, which is one of the legislative requirements to qualify for relief from paying property taxes and should be dismissed for the following reasons:

• The Board should not accept all the expenses listed by the Applicant in the Financial Information Form for she did not use her discretion in expenses incurred like cable, two telephones (land line phone and cell phone), owning a car with its expenses, spending money on a pet and buying gifts for family and friends.
• The Applicant's Bank statements show several cash withdrawals from the Bank every month. According to her testimony she paid cash for her expenses with no clear evidence. The Board was provided only with the estimates of most of the Applicant's expenses.
• The Applicant owns a 2-bedroom and a 2-bathroom pent house condominium with a parking space and if she did not own a car, she could have rented the parking space to generate some income.
• There is equity in the house for an identical property was sold for $685,000 in May 2016.
• The extreme poverty cases are for the Applicants who are unable to provide the daily necessities. This Applicant is able to meet her obligations as a tax payer considering her assets and the expenses.

Board's Analysis

17The intent of the legislation is to provide relief for property owners who cannot pay their property taxes in full or in part due to sickness or extreme poverty in a given taxation year. Either of these two eligible criteria must exist in order for a property owner to fulfill the first part of the test.

18The Applicant did not present the Board with any evidence regarding sickness and did not base her application for tax relief on sickness. Accordingly, the Board finds that sickness is not present.

19The Applicant presented evidence and submissions that she was unable to pay 2016 property taxes due to extreme poverty.

20The Act qualifies the level of poverty as "extreme" and in the Board's view, this raises the level of requirement to qualify for relief under the Act to a level that is materially and substantially above that of the simple and ordinary meaning of poverty. The Board believes that individuals must demonstrate that after having called upon every resource available to them and having explored every reasonable opportunity to mitigate any financial stresses there are no means of being able to pay some or all of their property taxes.

21The Board has considered the Applicant's oral testimony and has reviewed all of the evidence pertaining to the financial situation of the Applicant to determine whether the Applicant is able to pay her taxes and whether she is living in extreme poverty.

22The Board is not satisfied that the Applicant is unable to pay her taxes for the following reasons:

23The Applicant's evidence about her cash advances used to loan money to her daughter suggests an ability to pay her property taxes. In the Board's view, if the Applicant was able to receive cash advances for substantial amounts by paying 11.99% interest rate to loan to her daughter, she could have been able to pay her monthly property taxes from that money which is only $223.00 per month.

24The Applicant was asked whether she considered to rent out a room in her condominium or her garage in order to generate an additional income to assist her to pay her property taxes. She stated that sometimes she thinks about doing so but then she changes her mind.

25The Applicant's explanation is not acceptable to the Board. It is noted that the Applicant pays $668.75 condominium fee every month. The Applicant could have used the additional income by renting out a room and her garage to help her pay her property taxes. Moreover, the Applicant owns a car that according to her testimony, she drives only to church and to her medical appointments. In her Financial Statement (Exhibit 1), she listed $93.00 per month as car expenses like gas, repair/maintenance. The Car insurance was not specified for she submitted $286.64 per month as her expenses for auto and home insurance in total. She also has listed public transportation expenses.

26Furthermore, the Applicant was asked why she has both a land phone line and a cell phone. Her explanation was that at home she uses the land line to speak to her friends and the cell phone is used outside the house. When it was brought to her attention that this was not economical, she then said that all her friends do the same thing.

27In the Board's view, based on the above evidence, the Applicant's life style does not show that she is living in extreme poverty.

28Moreover, while there is nothing in the Act requiring A. P. A. to sell the subject property, she does have considerable equity in the property that she can draw upon to pay her property taxes. In addition, even if the Board agrees that in the circumstances of this case all the monthly expenses incurred by the Applicant constitute basic needs, which the Board does not, she has net total income of $431.95 per month which is sufficient to pay her monthly property taxes of $223.00 per month.

29The Board agrees with Counsel for the City who stated that the payment of property taxes remains one of the foremost obligations of all home owners and when this obligation is not met the tax burden is passed on to all other tax payers.

30The Board finds that based on the expenses listed in paragraph 13, the Applicant has the ability to pay her $223.00 monthly property taxes despite her modest net monthly income of $431.95.

CONCLUSION

31Based on the reasons stated above, the Board finds that in 2016, the Applicant was not in a condition of extreme poverty, nor did the Applicant have an inability to pay her property taxes. Therefore, the Applicant does not qualify for relief under the Act from paying all or part of her 2016 property taxes.