Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 15, 2019

FILE NO.: WR 162544

Assessed Person(s): Charles John William Todesco

Appellant(s): Charles John William Todesco

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 32

Respondent(s): Superior-Greenstone District Locality ED

Property Location(s): CON 4 E PT LOT 4 PCL 12904

Municipality(ies): Superior-Greenstone District Locality ED

Roll Number(s): 5810-750-000-14300-0000

Appeal Number(s): 3320280 and 3368362

Taxation Year(s): 2018 and 2019

Hearing Event No.: 724481

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

Heard: October 10, 2019 by telephone conference call

APPEARANCES:

Parties	Representative
Charles Todesco	Self-represented
MPAC	Glenn Spiess
Superior-Greenstone District Locality ED	No one appeared

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

BACKGROUND

1Charles John William Todesco (the “Appellant”) is the owner of CON 4 E PT LOT 4 PCL 12904 (the “Subject Property”), which is in the Municipality of Superior-Greenstone District Locality ED.

2MPAC has assessed the current value of the Subject Property at $25,500 for the 2018 and 2019 taxation years.

3The Appellant has filed appeals for the 2018 and 2019 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”). It is his position that MPAC’s assessment of current value is too high. The Appellant takes the position that the correct value should be in the range of $10,340 and $10,810 (which is an increase of between 10% -15% over the agreed to value of $9,400 for the 2014 taxation year). At this hearing, MPAC takes the position that the correct current value is $23,400 for the 2018 and 2019 taxation years.

4Section 44(3)(b) of the Act directs the Board to reduce the current value of the Subject Property if similar lands in the vicinity have been assessed at a lower value (“equitable reduction”). The purpose of this provision is to fairly distribute the municipal tax burden according to the value of the property possessed by each ratepayer. MPAC takes the position that an equitable reduction is required and that the equitable value should be $21,600. The Appellant is of the view that the Subject Property is over-assessed and that an equity reduction is required. However, the Appellant provides no evidence of what the equitable value should be.

5At the completion of the hearing, the Board reserves its decision. Based on the following evidence, the Board finds the correct current value of the Subject Property is $24,000 for the 2018 and 2019 taxation years. Therefore, the Board reduces the returned assessment from $25,500 to $24,000 for the 2018 and 2019 taxation years.

RELEVANT LEGISLATION

6Section 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.

7Section 19(1) of the Act states:

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

8Section 19.2(1) of the Act states:

19.2(1) Valuation days – Subject to subsection (5), the day as of which land is valued for a taxation year is determined as follows:

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.

9Section 40(17) of the Act states:

40.(17) Burden of Proof - 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.

10Section 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.

ISSUES

11The issues to be determined on this appeal are:

1. The correct current value of the Subject Property for the 2018 and 2019 taxation years.
2. Whether there should be an equitable reduction of the current value of the Subject Property pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be.

Description of the Subject Property

12The Subject Property is 40 acres of vacant residential land (Not on Water), located W of Black Sturgeon Road at Con 4 E PCL 12904 TBF Stirling TWP, in Superior-Greenstone Dist. Locality, ED with seasonal access.

DISCUSSION, ANALYSIS AND FINDINGS

Issue No. 1: The Correct Current Value of the Subject Property for the 2018 and 2019 Taxation Years

MPAC’s Evidence

13Glenn Spiess presents a Valuation Report, dated July 2, 2019 (“Valuation Report”) which he prepared and testifies to the information contained therein.

14Mr. Spiess states that he verified that the data including classification on the Subject Property is current and complete; and reviewed the sales and data of the suggested comparable properties used in his report.

15Mr. Spiess testifies that the returned assessment of the Subject Property includes a negative 6% for having seasonal access. He states that the Subject Property has potential for well and septic site services. He also testifies that MPAC assesses the Subject Property at the rate of $2,411.20 per acre for the first 10 acres (Total of $24,112); and at a significantly lower value of $46.24 per acre for the remaining 30 acres (Total of $1,387) for an overall value of $25,500 (rounded).

16Mr. Spiess testifies that his opinion of $25,500 as stated in his report has changed to $23,400 based on further review of the evidence and discussions with the Appellant.

17In support of current value, Mr. Spiess relies on the Direct Comparison Approach to Value and presents an analysis of the sales of six suggested comparable properties which occurred in 2015 and 2016. He states that four of the six suggested comparable properties are in the same homogeneous neighbourhood as the Subject Property and the remaining two suggested comparable properties are in other homogeneous neighbourhoods.

18Mr. Spiess states that these six suggested comparable properties are located at Stewart Lake Road (CON 1 W PT LOT 6 PCL 14000 TBF STIRLING TWP), sold in 2015 for $22,000; Stewart Lake Road (CON 1 W PT LOT 6 PCL 14000 TBF STIRLING TWP), Sold in 2016 for $30,000; Con 11 W PT LOT 6 PCL 11984 TBF LYON TWP, sold in 2015 for $42,000; Con 5 E PT LOT 3 PCL 8012 TBF BOOTH TWP, sold in 2015 for $32,000; LAHONTAN PT HUDSON BAY CO RESERVE RP 55R12752 PART 1 PCL 9401 TBF, sold in 2015 for $50,000; and Mountain Bay Drive (PLAN 55M546 BLK 20 WIGGINS TWP), sold in 2016 for $40,000.

19Mr. Spiess states that these six suggested properties have lot sizes ranging from 0.26 to 167.72 acres; and sale prices ranging from $22,000 to $50,000. Based on the sales of these suggested comparable properties, Mr. Spiess is of the view that the closest in similarity to the Subject Property are the two sales which occurred at Stewart Lake Road (CON 1 W PT LOT 6 PCL 14000 TBF STIRLING TWP), sold in 2015 for $22,000; Stewart Lake Road (CON 1 W PT LOT 6 PCL 14000 TBF STIRLING TWP), Sold in 2016 for $30,000. Based on these two sales, Mr. Spiess is of the view that the current value should be $23,400.

20On cross-examination Mr. Spiess states that in determining the assessed value of the Subject Property he has given no consideration to the assessed value of the Subject Property for the 2014 taxation year, because it is based on a different valuation date of January 1, 2012.

21Mr. Spiess also testifies that suggested comparable property Roll Number 5810-750-000-14100 bordering the Subject Property is going to be presented into evidence. Mr. Spiess argues that although this suggested comparable property is closest in size and distance, it is landlocked and receives a 50% reduction because it has no “legal” access and is surrounded by private properties, which is different than the 6% reduction received by Subject Property for having seasonal access.

MPAC’s Submissions

22Based on the above evidence, MPAC argues that the current value is $23,400.

Appellants’ Evidence

23The Appellant testifies that the Subject Property is treed land consisting of bedrock outcrops and thin soil with no arable land. He states that there is a large rift fault running east to west through the property dividing it in two sections, making access and development to the southern portion of the Subject Property impossible because it is surrounded by private land.

24The Appellant testifies that the Subject Property is forested with jack pine, spruce, fir, aspen and birch. However, the Appellant states that he does not own the pine as it is reserved for the Crown. The Appellant testifies that access to the Subject Property is seasonal on a non-maintained forest access road, with no municipal services, no water source on the property and no reasonable access to water.

25The Appellant states that there is a camper unit that is occasionally used in the fall while hunting and an old travel trailer used for storage. However, no issues are raised by the Appellant in this regard.

26The Appellant presents evidence regarding assessment issues with the previous assessment cycle (2013 through 2016 taxation years) with a valuation date of January 1, 2012. These issues involve assessment values, Request for Reconsideration (“RFR”) and late filing etc. for which the Appellant expresses deep dissatisfaction with the responses from MPAC.

27The Appellant presents 2012 news articles by CBC, Netnews and MPAC’s website regarding increases in property values in Nipigon, Red Rock, Schreiber, Terrace Bay, Greenstone, Thunder Bay and Dorion. He states that the article shows that Thunder Bay saw increases of up to 7%, while Nipigon, Red Rock, Schreiber, Terrace Bay, Greenstone and Dorion remain depressed and values declined.

28The Appellant presents evidence obtained from MPAC’s website which states that in 2017 property values increased in areas such as Nipigon, Red Rock, Dorion and Thunder Bay property in the range of 5.3% - 13.2%. The Appellant argues that the Subject Property increased by 270% and there is no evidence to support the increase.

29In support of the correct current value, the Appellants present two suggested comparable properties. The first suggested comparable property Roll Number 5810-750-000-14100 sold for $10,500 in 2014. The Appellant states that this suggested comparable property is in the same homogeneous neighbourhood as the Subject Property, with similar in lot size, and access via private properties. The second suggested comparable property Roll Number 2810-010-001-02600 sold for $32,000 in 2015 (also presented by MPAC) and has a total lot size of 160.5 acres.

30Although the Appellant presents the above two sales of comparable properties, the Appellant is of the view that the correct current value should be in the range of $10,000 and $11,000 rounded, which is based on a 10-15% increase of the 2014 RFR settlement of $9,400.

Appellants’ Submissions

31Based on the above evidence, the Appellant submits that the correct current value should be in the range of $10,000 and $11,000 as stated above.

Findings on Current Value for 2018 and 2019 taxation years

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.

33For the reasons discussed below, the Board finds the current value is $26,000.

34Regarding MPAC’s negative 6% adjustment for having seasonal access, the Board accepts this adjustment because no other evidence was adduced to the contrary by the Appellant.

35Regarding the six sales presented by MPAC in support of current value with sales ranging from $22,000 to $50,000; and total lot size ranging from 0.26 to 166 acres. The Board finds that the best evidence is the average sale price of $26,000 of the two sales of the same property at Stewart Lake Road (CON 1 W PT LOT 6 PCL 14000 TBF STIRLING TWP), which sold for $22,000 in 2015; and for $30,000 in 2016.

These two suggested comparable properties are similarly assessed, located in the same neighbourhood, and most similar in size to the Subject Property.

36Regarding the Appellant’s argument that the Subject Property’s lot is treed, bedrock, thin soil, not arable and has a large rift fault that divides the property in two sections making access and development impossible. The Board finds that the Appellant presents no quantitative evidence to demonstrate the impact of these deficiencies on the assessed value of the Subject Property

37Regarding the assessment issues (values, RFR, late filing etc.) raised by the Appellant for the previous assessment cycle (2013 through 2016 taxation years) with a valuation date of January 1, 2012. The Board finds that issues dealing with the previous assessment cycle are not before this Board. The Board finds that the previous assessment values which is based on a valuation date of January 1, 2012 have no impact on the appeal at hand; because the current appeal is based on a valuation date of January 1, 2016, which covers the assessment period (2017 through 2020 taxation years).

38Regarding the 2012 news articles by CBC, Netnews and from MPAC’s website, the Board finds that the statistics quoted in these news articles are not relevant to the appeals at hand with a valuation date of January 1, 2016 and that the articles are general in nature to the entire City, Township etc. and not specific to the homogeneous neighbourhood of the Subject Property. Therefore, no weight is given to these articles.

39Regarding the two sales presented by the Appellant as Roll Number 5810-750-000-14100 (bordering the Subject Property) sold for $10,500 in 2014; and Roll Number 2810-010-001-02600 sold for $32,000 in 2015 (also presented by MPAC):

I. The Board rejects the sale in 2014, because this sale is too far removed from the valuations date of January 1, 2016 to be a true test of current value; and MPAC also provides evidence that this suggested comparable property receives a reduction of 50% for being a landlock property without any “legal” access. The Appellant adduces no legal evidence to the contrary; and

II. Regarding the second sale in 2015, this sale was also presented by MPAC and taken into consideration by the Board for current value.

40Based on the evidence, the Board finds the current value is $26,000.

Issue No. 2: Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.

41MPAC presents an Equity Analysis Report in which the assessments of 15 comparable properties are compared to their respective sale prices to determine the Assessment to Sales ratio (“ASR”). The ASR is computed by dividing the assessed values of a property sold, by its sale price.

42MPAC states that these 15 comparable properties are Property Code 100 (Vacant Residential Land Not on Water) sold over the period January 1, 2015 to December 31, 2016 and located within the same homogeneous neighbourhood as the Subject Property and surrounding areas.

43The analysis of the sale of these 15 comparable properties shows a Level of Appraisal (“LOA”) of 0.927 and a Coefficient of Dispersion (“CoD”) of 24.6. Based on this finding, MPAC’s opinion is that an equity reduction is required, because the findings fall outside MPAC’s standards of 0.95 to 1.05 for the LOA and below 25 for the CoD.

MPAC’s Submissions

44MPAC argues that the equitable value should be ($23,400 X .927) = $22,000 rounded.

Appellants’ Evidence

45The Appellant presents no additional evidence in support of equity.

Appellant’s Submissions

46The Appellant submits than an equitable reduction is warranted. However, he adduced no other evidence to show what the value should be.

Findings on an Equitable Reduction

47In reviewing the equity analyses presented above, the Board finds the best evidence is the Median ASR of 0.927. The ASR of 0.927 is based on fifteen sales, of similar property types, in the same vicinity and supports an equity reduction. Therefore, the Board applies the Median ASR of .927 to the current value of $26,000 to arrive at an equitable value of $24,000 rounded ($26,000 x 0.927). The Board rejects the ASR of 1.18 for the suggested comparable property Roll Number 5810-750-000-14100 which sold for $10,500 in 2014 and presented by the Appellant. The reason being that the sale in 2014 is too far removed from the valuation date of January 1, 2016 to provide any meaningful data when determining whether an equitable reduction is required.

DECISION

48The Board finds the current value of the Subject Property for the 2018 and 2019 taxation years is $24,000. Pursuant to s.44(3)(b) of the Act, the Board reduces the returned assessment from $25,500 to $24,000 for the 2018 and 2019 taxation years.