Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: December 27, 2019

FILE NO.: WR 163292

Assessed Person(s): Albert Itwar, Chanpattie Itwar

Appellant(s): Albert Itwar, Chanpattie Itwar

Respondent(s): Municipal Property Assessment Corporation("MPAC") Region 14

Respondent(s): Town of Richmond Hill

Property Location(s): 28 Milos Road

Municipality(ies): Town of Richmond Hill

Roll Number(s): 1938-060-121-01159-0000

Appeal Number(s): 3268134, 3302191, and 3356492

Taxation Year(s): 2017, 2018 and 2019

Hearing Event No.: 727703

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

Heard: December 6, 2019 in Richmond Hill, Ontario

APPEARANCES:

Parties	Representative
Albert Itwar	Self-represented
MPAC	Elva Yu
Town of Richmond Hill	No one appeared

DECISION OF THE BOARD DELIVERED BY ANTHONY LaREGINA

BACKGROUND

1Albert Itwar (the "Appellant") is the owner of 28 Milos Road (the "subject property"), which is a single-family detached two-storey home located in the Town of Richmond Hill. The property has a total effective frontage of 44.95 feet and a total effective depth of 88.58 feet for a total effective site area of .09 acres.

2The two-storey structure was built in 2010 and has a current quality of construction of 6.5. The total building area is 2,557 square feet with 1,161 on the main level, and 1,396 square feet on the second floor. The basement has a building area of 1,240 square feet with no finished space and a basement height of 8 feet. The two-storey home has four bedrooms and two and a half bathrooms.

3Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31, (the "Act"), the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 ("current value").

4MPAC has assessed the current value of the subject property at $981,000.

5The Appellant filed an appeal for the 2017, 2018 and 2019 taxation years with the Assessment Review Board (the "Board"). It is the Appellant's position that MPAC's assessment of current value is reasonable, but he is seeking some minor downward adjustments to compensate for nuisances such as: the property abuts airport, is in close proximity to a super mailbox, has a sidewalk and there is heavy traffic proximate to the property. At this hearing, MPAC takes the position that its current value is $1,057,000 based on the average time adjusted sale value of four similar properties located in the vicinity of the subject property.

6Pursuant to s. 40.(11) of the Act, the Town of Richmond Hill is a party to this proceeding. However, it did not advise the Board of its position on the issues raised in these appeals and no one appeared at the hearing on behalf of Richmond Hill.

7Section 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.

8MPAC takes the position that no equitable reduction is required. The Appellant has taken no position with respect to s. 44.(3)(b).

9At the completion of the hearing, the Appellant requested written reasons, therefore the Board reserved its decision.

10The Board finds that the current value for the 2019 taxation year is $1,012,658. Pursuant to s. 44.(3)(b) of the Act, an equitable reduction of this value of 4.14% is justified resulting in an assessed value of $970,733 rounded to $971,000.

Relevant Legislation

11The 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.

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

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 each subsequent period consisting of four consecutive taxation years, land is valued as of January 1 of the year preceding the first of those four taxation years.

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.

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.

Current value

12The first issue to be determined on this appeal is the correct current value of the subject property for the 2017, 2018 and 2019 taxation years.

MPAC's Evidence

13Elva Yu, representing MPAC, prepared both a Valuation Report and an Equity Report respecting the subject property which she submitted into evidence.

14Ms. Yu identified six comparable property sales which sold between 2015 and 2016 in the vicinity of the subject property. These properties are illustrated in the following table.

	Subject Property	Property 1	Property 2	Property 3	Property 4	Property 5	Property 6
Address	28 Milos Road	60 Mansard Drive	7 Farmhouse Crescent	12 Langhorst Crescent	17 Brower Avenue	20 Beth Avenue	20 Beth Avenue
Current Value Assessment	$981,000	$981,000	$976,000	$962,000	$956,000	$1,000,000	$1,000,000
Sale Date		October 2016	May 2015	October 2016	December 2016	May 2016	October 2015
Sale Value $		1,225,000	830,000	1,368,000	1,292,000	2,205,000	$1,045,000
TAS Value $		1,030,822	974,996	1,151,154	1,052,092	1,106,287	$1,099,504
Adjusted for corner lot 2%			994,495
Effective Site Area Acres	0.09	0.09	0.09	0.09	0.09	0.10	0.10
Actual/Effective Yr. Built	2010	2010	2008	2006	2005	2007	2007
Quality	6.5	6.5	6.5	6.5	6.5	6.5	6.5
Total Building Area Square Feet	2,557	2,557	2,556	2,516	2,516	2,549	2,549
Similar/Superior/Inferior		Similar	Similar	Inferior	Inferior	Similar	Similar

Ms. Yu points out in her testimony that while all six properties are good comparables to the subject property she claims that the best comparables are properties one, two, five and six as they are the most similar in terms of building area to the subject property.

15Ms. Yu demonstrated that the time adjusted sale range of the four best comparables is between $994,996 and $1,106,287 therefore estimating that the current value of the subject property should be within the time adjusted sale range.

16Relying on its evidence, MPAC submits that the correct current value for the 2017, 2018 and 2019 taxation years is $1,057,000 reflecting the average time adjusted sale value of the four most comparable properties.

Appellant's Evidence

17Mr. Itwar produced no evidence in support of current value, no market evidence or sales of similar properties to demonstrate the potential market value of the subject property.

18Mr. Itwar produced a list of nuisances which he claims he discussed with MPAC during a settlement meeting when MPAC refused to make any of the adjustments he requested. The nuisances included: Heavy Traffic, Abuts Airport, Abuts Super Mailbox and Sidewalk. Mr. Itwar presented no documentary evidence to substantiate these nuisances other than a list of nuisances and adjustment factors published by MPAC that it normally applies when the nuisances exit. Mr. Itwar stated that MPAC made him an offer to reduce his assessment by $8,000 but could not explain how they determined the amount. Mr. Itwar chose not to accept the offer.

Board's Findings

19The Board has reviewed and analysed the six comparable property sales submitted by MPAC in support of current value and makes the following observations.

20The Board agrees with MPAC that the two most similar properties are properties one and two, 60 Mansford Drive and 7 Farmhouse Crescent. They are virtually identical in building area, lot size, quality of construction and year built. The Board also agrees with MPAC that property three and four are inferior as they have a smaller building area. While property five and six may be similar, there are a number of questions surrounding these sales. Both sales are of the same property, 20 Beth Avenue, which sold twice in just over a year for substantially different values. Without further information on the validity of the sales the Board prefers not to use these two sales in determining the current value of the subject property.

21The Board will accept the adjusted sale values of property one and two of $1,030,822 and $994,495 (974,996 plus 2% corner lot adjustment) as the basis to establishing the current value of the subject property. The average of these two sales produces $1,012,658 which represents the current value of the subject property as of January 1, 2016. This value also falls within the acceptable time adjusted sale range established by MPAC.

22The Board agrees with MPAC no further nuisance adjustments should be made as requested by Mr. Itwar as he presented no evidence to substantiate the existence of the nuisance which would be necessary to establish that it is likely such a nuisance exits. Some of the evidence that would normally be expected is not evidence that would be solely in control of MPAC – for instance it was open to the Appellant to produce a map to establish that the subject property abuts an airport or to prove that the noise from the airport is impacting the value of his home. The Appellant could have also taken photoqraphs of the neighbourhood to show that the property abuts a super mailbox. It appears from all the evidence that the subject property does not abut an airport, or a super mailbox and does not have a heavy traffic problem. The sidewalk is common to all the other homes on the street and is not considered by MPAC to be a nuisance. Based on the submissions before me, and in consideration of reviewing the evidence pertaining to property sales, the Board is not satisfied that nuisance adjustments are warranted.

Whether there should be an equitable reduction of the current value pursuant to s. 44.(3)(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 should the amount of this reduction be?

MPAC's Evidence

23After withdrawing property number 30 from the Equity Study, 28 Bowkett Drive as an outlier with an ASR of 1.807, Ms. Yu relies on her Equity Study showing a median Assessment to Sale Ratio ("ASR") of 0.969 based on the arm's length sales of 29 properties within 1.0 kilometres of the subject property. Her position is that the ASR is within the reasonable range of 0.95 to 1.05, therefore no further downward adjustment is required to compensate for the assessment of similar properties in the vicinity.

24Ms. Yu concludes MPAC is not seeking an increase in assessment and therefore recommends the assessed value of $981,000 be confirmed for the 2017, 2018 and 2019 taxation years.

25The Appellant has submitted no evidence in support of an equity argument.

BOARD'S ANALYSIS AND FINDINGS

26Section 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."

27The 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 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.

28In 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]

29The 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).

30The test set out in s. 44.(3)(b) of the Act, requires that the Board refer to similar lands in the vicinity. 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 Limited, 2017 ONSC 1299, 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 OAC 203, 37 MPLR 175, 8 ACWS (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.

31The 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 time adjusted sale price.

32Ms. Yu relies on a median ASR of 0.969 based on the sample of 29 arm's length sales of properties in the vicinity of the subject property. During cross-examination it was determined that Ms. Yu had only included four of the six property sales used to establish current value into the equity analysis. After adding the two additional properties, 12 Langhorst Crescent and 17 Brower Avenue the median ASR now becomes 0.955.

33The Board finds that the median ASR of 0.955 does fall within MPAC's generally acceptable standard of 0.95 and 1.05 which according to MPAC does not warrant an equity adjustment. However, the Board has also conducted a statistical analysis of the same 31 ASRs. That analysis shows that the mean ASR is 0.9586 with a confidence interval of 0.0204. These results indicate that the true mean is likely between 0.9382 and 0.979. Any time the high end of the likely range is below 1.0 it is highly probable that other property in the vicinity is under assessed therefore requiring a downward adjustment based on a mean ASR of .9586.

CONCLUSION

34The Board finds that the current value of the subject property, as of January 1, 2016 valuation date, is $1,012,658. Furthermore, the Board finds that a 4.14% equitable adjustment is required under s. 44.(3)(b) of the Act bringing the assessed value to $970,733 for the 2019 taxation year.

35Based on the evidence before us, the Board will reduce the assessment from $981,000 to $971,000 (rounded) for the 2017, 2018 and 2019 taxation years.