Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 06, 2019

FILE NO.: WR 162552

Assessed Person(s): R.H. and N.C.

Applicant(s): R.H. and N.C.

Respondent(s): City of Hamilton

Property Location(s): Withheld

Municipality(ies): City of Hamilton

Roll Number(s): Withheld

Appeal Number(s): 3369572

Taxation Year(s): 2018

Hearing Event No.: 724774

Legislative Authority: Section 357(1)(d1) of the Municipal Act, S.O. 2001, c. 25

Heard: October 23, 2019 in Hamilton, Ontario

APPEARANCES:

Parties

Representative

R.H. and N.C.

Self-represented

City of Hamilton

Irwin Sampat

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1R.H. and N.C. (the “Applicants”) filed an application with the City of Hamilton to have their 2018 taxes reduced, cancelled or refunded because they were unable to pay due to either sickness or extreme poverty, as provided for under s. 357(1)(d1) of the Municipal Act, S.O. 2001, c. 25 (“Act”).

2The City of Hamilton has passed a by-law, delegating its authority to determine such applications to the Assessment Review Board (the “Board”) under s. 357(11) of the Act.

ISSUE

3The issue before the Board is whether or not the Applicants’ 2018 property taxes should be cancelled, reduced or refunded due to their inability to pay because of sickness or extreme poverty. This requires the Board to decide a number of things. First the Board must determine, based on the evidence at the hearing, if the Applicants were unable to pay their 2018 property taxes. If the Board determines they were unable to pay their property taxes, the Board must then determine if the reason they were unable to pay was either sickness or extreme poverty.

4If the Board determines that the reason was sickness or extreme poverty, the Board must then decide on the amount of the taxes levied to be cancelled, reduced or refunded.

DECISION

5The Board finds that the Applicants had an inability to pay their 2018 property taxes in full, due to both sickness and extreme poverty. The Board finds that the 2018 property taxes are to be reduced, by the amount of $636.

REASONS FOR THE DECISION

Were the Applicants Able to Pay the Property Taxes Levied in 2018?

6The Applicants reported an annual family net income for 2018 of $63,555 or $5,296 per month, rounded. This amount includes $861 in HST rebates, Family Tax Credits of $13,662, an income tax refund of $1,530, Ontario Works payments of $14,320, payments from a Canada/Provincial support program in the amount of $1,730, employment income of $3,249, sales at the family business of $14,779 and $13,434 in cash deposits of unknown origin to two checking accounts.

7The Applicants reported that monthly financial activity for the household was transacted through two bank accounts; one for the household and one for the family business. The balance on those accounts combined on January 1, 2018 was approximately $287. The balance on December 31, 2018 was $535.

8The Applicants submitted that the subject property has a value of approximately $250,000 - equivalent to the 2018 assessment. The mortgage balance at the end of 2018 was approximately $238,000.

9Monthly expenses reported by the Applicants for 2018 totaled approximately $5,349. This figure was determined from their testimony and the documentary evidence submitted in the form electronic records of activity on the two chequing accounts. These expenses are summarized as follows (all rounded to the nearest dollar):

• Mortgage payments: $1,341

• Groceries and clothing: $927

• Household expenses: $75

• House and Automobile Insurance: $226

• Car Expenses (fuel, repairs): $120

• Utilities, Internet, cable, phone for home and business: $563

• Business supplies and 411 directory: $68

• Business lease: $1,072

• Business cleaning: $150

• Property taxes: $241

• Credit card payments: $341

• Banking and transaction fees: $195

• Funeral expenses: $30

10The Applicants submitted that they require the equivalent amount paid in property tax to support their household expenses and that a refund of the 2018 taxes paid would allow the family to improve their standard of living and get back to their normal life after N.C.’s sickness prior to and during 2018.

City’s Submissions

11The City submitted that the total family income indicates that monthly commitments are being met and that the monthly expenses declared by the Applicants were essentially the same as the monthly income per month. The City also pointed out the relatively significant cash deposits to the two bank accounts, and the lack of clarity around the source of those deposits.

12The City submitted that that the property tax account in the City’s records indicated payments of $2,891 and a year-end balance in 2018 of $1,381 after adjustments and penalties from previous tax arrears were accounted for. The monthly average remaining on the account would be equivalent to $115.

13The City submitted that the Applicants have proven they were able to pay most of the property taxes levied in 2018.

Board’s Analysis

14The Applicants faced significant challenges in 2018 that impacted their ability to meet certain commitments financially. Most of those commitments were carried over from previous years in one form or another. R.H. testified that approximately $7,350 was owing on a VISA account and a Canadian Tire Master Card account combined. Other credit cards are in collections. He testified further that he made sporadic payments to these credit cards and some utility accounts in an effort to keep one or more of those accounts active so he could run the business and so that utilities were not turned off as a result of non-payment.

15The Board recognizes the plight the Applicants experienced in 2018. The comparison of monthly income and expense is a common measure used by the Board to calculate if basic household needs can be met, prior to determining if Applicants can meet the property tax obligation.

16However, monthly finances are not the only measure used by the Board to determine if the Applicant were able to pay property taxes. The Board regularly reviews overall financial conditions, including mortgage and other debts owing, credit card debt and other loans or commitments. In addition, the Board reviews, in detail, the expenses incurred during the year subject to the application to determine what of these expenses are discretionary and what of these expenses are considered as necessities of living.

17In this case, the monthly expenses are approximately $53 more per month than income. The Applicants made a concerted effort to keep current with the tax payments, but because of N.C.’s illness only R.H. was able to work continuously through the year.

18The Board finds that the majority of the expenses in evidence were non-discretionary and were necessary for the family to remain in the home and to continue the family business in a time of hardship.

19While the City pointed out some question as to the origin of cash deposits in the account, this only matters if there was an additional stockpile that could be drawn upon as the Applicants desired. The Board found the testimony of the Applicants to be credible with respect to the financial resources available. There was no evidence to suggest they were ‘holding back’ any money in their possession. The Board finds that if there had been additional money available it would have been put to good use in bringing the various accounts that were in arrears, up to date, thereby avoiding NSF and additional interest charges.

20The Board therefore finds that the Applicants were unable to pay their property taxes in full during the 2018 taxation year.

Why were the Applicant unable to pay their 2018 property taxes in full?

21The Board must determine why the Applicants were unable to pay all of the property taxes in 2018. In the Board’s view, both sickness and extreme poverty play a role in this case. N.C.’s sickness during 2018 greatly affected her ability to work in the family business and therefore, impacted the family income.

22This lack of ability to work led to a condition of extreme poverty for the rest of the family. The Board notes that, in addition to working in the family business, R.H. also took on part time work later in the year to help the family to make ends meet. Even with these efforts, the finances came up short in the amount of $53 per month on average. The Board also notes that a number of utility accounts, and two credit cards still have significant balances owing.

23Accordingly, the Board finds that the Applicants were in a situation of extreme poverty in 2018, and that N.C.’s sickness also played a part in their inability to pay the property taxes levied in full.

24The Board finds therefore, that the 2018 property taxes levied are reduced by $636; the annual amount reflected by the average monthly financial shortfall demonstrated by the evidence at the hearing.