Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: May 31, 2019

FILE NO.: WR 151993A

AMENDED DECISION ISSUED ON: January 10, 2020

Assessed Person(s): Elzbieta Malgorzata Manitius

Appellant(s): Elzbieta Malgorzata Manitius

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 9

Respondent(s): MPAC

Property Location(s): 1 Brule Gardens

Municipality(ies): City of Toronto

Roll Number(s): 1904-011-270-05000-0000

Appeal Number(s): 3252357, 3294165 and 3353973 (deemed 2018 and 2019 appeals)

Taxation Year(s): 2017, 2018 and 2019 (deemed appeals)

Hearing Event No.: 688365

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

Heard: January 16, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Elzbieta Malgorzata Manitius	Robert Baranowski
MPAC	Erin Comeau
City of Toronto	No one appeared

AMENDED DECISION OF THE BOARD DELIVERED BY Mark Spraggett

In accordance with Rule 114 of the Assessment Review Board’s Rules of Practice and Procedure, as amended in May 2019, related to the correction of minor errors and in accordance with Rule 21.1 of the Statutory Powers and Procedure Act regarding the correction of errors, this order is issued to remove the last sentence in paragraph 9. There are no other changes in this decision.

REASONS

Background

1Elizbieta Manitius (the “Appellant”) is the owner of 1 Brule Gardens (the “Subject Property”), a two-storey detached single-family residential property.

2Pursuant 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.

3MPAC has assessed the current value of the Subject Property at $2,974,000 for the taxation year 2017.

4The Appellant has filed an appeal for the 2017 taxation year with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Act, and she has been deemed to have brought the same appeal with respect to the Subject Property for the 2018 and 2019 taxation years pursuant to s. 40(26) of the Act.

5Pursuant to s. 40(11) of the Act, the Municipality, (in this case, the City of Toronto) is a party to this proceeding. However, the Municipality did not advise the Board of its position on the issues raised in these appeals, and no one appeared at the hearing on the Municipality’s behalf.

6MPAC asserts that the correct current value is $3,250,000. The Appellant asserts that the correct current value is $2,974,000.

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 by each ratepayer.

8MPAC takes the position that an equitable reduction is not required. The Appellant takes the position that the correct current value of the Subject Property should be reduced to $2,300,000 to make it equitable with that of similar lands in the vicinity.

9At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the correct current value for the 2017 tax year is $2,974,000.

Relevant Legislation and Rules

10The Act states that:

1. “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.

11The Board’s Rules of Practice and Procedure:

40. Special Notices – A party to a summary proceeding must give notice to the Board, and all other parties to a summary proceeding, within 30 days of the day set in Rule 33 as the start of a proceeding, that the party intends to raise with the Board:

(b) a higher assessment than that returned by the MPAC;

12In addition to the 2017 taxation year appeal before the Board, there are also appeals of the 2018 and 2019 taxation years assessment of property. This is because subsection 40(26) of the Act deems that an appellant has brought the same appeals for the 2018 and 2019 taxation years if the 2017 taxation year appeal has not been finally disposed of by March 31, 2019.

ISSUES

13The issues to be determined on this appeal are:

1. What is the correct current value of the Subject Property? and

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

14The Subject Property is a detached two-storey single-family residential property, located in the Swansea neighbourhood of the City of Toronto. The total building area for the house on the Subject Property is 4,244 square feet (“sq. ft.”). Situated on a lot that abuts a ravine, it has a site area of 0.28 acres. The building has a year built of 1937 and renovations were done in 2006. The house has a construction quality rating of 8.0.

Discussion, Analysis and Findings

Issue 1: What is the correct current value of the Subject Property?

Findings

15In light of the following finding, it is unnecessary to provide a detailed summary of the parties’ evidence and submissions.

16MPAC submits that the correct current value is $3,250,000 and submitted evidence in support of this submission. The Board has considered MPAC’s evidence and submissions in support of its position regarding the correct current value of the Subject Property, but finds that the evidence does not support the higher value asserted by MPAC. However, in order to seek a higher assessment, MPAC is required, under Rule 40(b) of the Board’s Rules of Practice and Procedure, to give notice to the Board and all other parties of its intentions to seek a higher assessment within 30 days of the Commencement Date for this appeal. The Board notes that MPAC has not done so. For these reasons, the Board finds that the correct current value of the Subject Property is $2,974,000.

Issue 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](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?

MPAC’s Evidence

17Mr. Comeau, a Valuation Analyst represented and testified on behalf of MPAC. He submitted an equity study (“MPAC's Equity Study”) which concludes that an equity adjustment is not required.

18Mr. Comeau relied on MPAC’s corporate database to identify 14 sales of single-family detached (not on water) properties within an extended time interval, from January 1, 2015 to December 31, 2016. He also selected a vicinity considered large enough in relation to the Subject Property, to ensure there was an adequate sample of properties from which to arrive at a reliable conclusion. He states in MPAC’s Equity Study that the properties only need to be of the same general nature, character or function in order to demonstrate they are similar to that of the Subject Property.

19Mr. Comeau testified that in terms of the degree of similarity of the 14 properties to that of the Subject Property, he identified single-family detached (not on water) property sales for his equity analysis.

20Mr. Comeau testified that he did not select properties that sold on the same street as the Subject Property, because they were not considered similar to the Subject Property.

21Mr. Comeau testified that he has no information regarding the geographic location of the 257 properties used to determine the time adjustment factors to adjust the sale prices to the valuation date.

22MPAC’s Equity Study maintains that equity is achieved if the level of appraisal (“LOA”) of a sample of properties falls within the range 0.90 and 1.10 as established by the International Association of Assessing Officers (“IAAO”). In this instance the Study indicates that for the 14 properties used as the sample, the LOA is 0.969, which is within MPAC’s target range, suggesting that an equitable adjustment is not required.

MPAC’s Submissions

23Relying on its evidence, MPAC submits that an equitable reduction of the current value for the 2017 taxation year is not required.

Appellant’s Evidence

24Mr. Baranowski testified on behalf of and represented the Appellant. He stated his conclusion that an equity adjustment is required.

25Mr. Baranowski testified that there is insufficient information available regarding MPAC’s 14 property sales to establish whether they are similar to the Subject Property. He therefore states that MPAC’s derived assessment to sale ratio (“ASR”) values from these property sales may be inaccurate.

26Mr. Baranowski testified that MPAC’s time adjustment factor (“TAF”) calculations, based on 257 properties, are not reliable because there is insufficient information available to indicate whether the properties are located in the same homogeneous neighbourhood.

27Mr. Baranowski submitted information on nine properties that he considers similar to the Subject Property. He states that because the properties sold within one year on either side of the legislated valuation day of January 1, 2016 (referred as the shoulder years), no time adjustments were applied. The table below provides the property details:

Table

Property	Assessment $	Sale Amount $	Sale Date	Effective Site Area sq. ft.	Site Area Different to Subject	Quality Class	Building Total Area sq. ft.	Building Area Different to Subject	ASR	Year Built
Subject	2,974,000			12,428.96		8	4,244			1937
6 Brule Gardens	1,760,000	1,915,000	May 2015	8,736	-30%	7.5	2,071	-51%	0.92	1936
10 Brule Gardens	2,294,000	2,200,000	September 2015	9,185	-26%	7.5	3,903	-8%	1.04	1938
18 Brule Gardens	1,923,000	1,730,000	August 2015	9,350	-25%	7.0	2,211	-48%	1.11	1946
76 Brule Gardens	2,435,000	2,780,000	September 2016	10,250	-18%	7.5	3,269	-23%	0.88	1935
16 Brule Terrace	1,745,000	2,100,000	October 2016	13,091	+5%	7.0	2,143	-50%	0.83	1940
89 Brule Gardens	1,941,000	2,005,000	May 2016	6,930	-44%	7.5	2,021	-52%	0.97	1941
65 Brule Gardens	2,789,000	3,280,000	November 2016	8,633	-31%	9.0	3,439	-19%	0.85	2016
35 Brule Gardens	1,614,000	1,785,000	July 2015	8,374	-33%	6.5	2,886	-32%	0.90	1950
15 Brule Crescent	1,306,000	1,595,000	June 2016	9,024	-27%	6.5	1,371	-68%	0.82	1954
MEAN									0.92
MEDIAN									0.90

28Mr. Baranowski stated that the Board should apply the median ASR of 0.90 to calculate an equitable adjustment to the correct current value.

Appellant’s Submissions

29The Appellant relies on Mr. Baranowski’s evidence and submits that an equitable reduction is required and that the correct current value for the 2017 taxation year should be reduced to $2,300,000.

30The Appellant argues that there are many similar properties on the same street as the Subject Property. He refers to an ASR of 0.89, maintaining that this should reduce the current value to $2,180,500 as another option.

31The Appellant disputes MPAC’s trend line analysis regarding the determination of time adjustments, suggesting the graph is incorrect and misrepresents the adjustments for time.

Findings

32The purpose of an equitable reduction has been described 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 the application of 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.

In 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.

33However, the goal of the Act is to determine the correct current value. Any equitable reduction in the current value results in an incorrect current value. Consequently, an equitable reduction should only be made where there is clear evidence to support that such a reduction is warranted. In this regard, the burden of proof rests with the Appellant to establish, on a balance of probabilities, that an equitable reduction is required.

34The term “vicinity” is not defined in the Act, but refers to the appropriate geographical area that will yield meaningful comparable properties (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (ON CA) at page 6).

35The Board finds that MPAC's criteria for selecting the 14 property sales used in its equity analysis, namely character, form and function is reasonable. The Board is not persuaded by the Appellant’s argument that insufficient information is available about the properties. The Appellant provided no evidence to convince the Board these properties are not a suitable sample. The Board finds that MPAC has provided sufficient data respecting the 14 properties to satisfy the Board that these properties are similar to the Subject Property and, therefore, it is appropriate for the Board to consider them when determining whether an equitable adjustment is required.

36The Board also finds that the Appellant’s nine property sales are similar to the Subject Property. The Board notes that five of the properties are also included in MPAC’s sample of 14 property sales. The Board does not accept MPAC’s assertion that some of the Appellant’s properties are not similar to the Subject Property. The Board is persuaded by the Appellant’s argument for considering the vicinity of these properties. The evidence indicates that these properties are located on the same street or abutting crescents/gardens to that of the Subject Property. For these reasons the Board shall consider both, MPAC’s 14 property sales and the Appellant’s nine property sales, of which four are new sales, giving a total of 18 properties.

37The Board does not accept the Appellant's submission that it is unnecessary to time adjust the sale values of the Appellant's similar properties when calculating ASR values. The Board finds that in this instance, there is a 3% to 12% difference between unadjusted and adjusted ASR values. On the upper end of the scale, this equates to approximately $187,000 unaccounted for in adjustments. The Board finds such a large variation to be significant. Therefore, to ensure consistency, accuracy and data integrity, the Board has relied on the time adjusted values for the 18 properties, applying MPAC’s TAF to adjust the sale prices for the Appellant’s proposed properties. The table below provides the time adjustments for the 18 properties.

38The Board does not accept the Appellant’s assertion that MPAC’s trend line is flawed and that its TAF’s are in error, because the Appellant called no expert evidence to support this assertion or to provide its own time adjustment analysis. MPAC’s analysis, on its face, provided a detailed description of its analysis and its results. For these reasons, the Board accepts MPAC’s TAF evidence. The Board finds that MPAC’s TAFs are based on market conditions over time for 257 property sales, representing a 24.9% change in the market. The Board finds that the TAFs reflect a reasonable measure for the purposes of establishing a consistent baseline from which the Board can make a determination regarding the issue before it.

Property	Assessment $	Sale Amount $	Sale Date	ASR (no time adjustment)	TAF	Sale Amount Time Adjusted	ASR Time Adjusted
Subject	2,974,000
6 Brule Gardens	1,760,000	1,915,000	May 2015	0.92	1.087	2,081,605	0.85
10 Brule Gardens	2,294,000	2,200,000	September 2015	1.04	1.039	2,285,800	1.004
18 Brule Gardens	1,923,000	1,730,000	August 2015	1.11	1.05	1,816,500	1.06
76 Brule Gardens	2,435,000	2,780,000	September 2016	0.88	0.917	2,549,260	0.96
16 Brule Terrace	1,745,000	2,100,000	October 2016	0.83	0.908	1,906,800	0.92
89 Brule Gardens	1,941,000	2,005,000	May 2016	0.97	0.954	1,912,770	1.02
65 Brule Gardens	2,789,000	3,280,000	November 2016	0.85	0.899	2,948,720	0.95
35 Brule Gardens	1,614,000	1,785,000	July 2015	0.90	0.935	1,668,975	0.97
15 Brule Crescent	1,306,000	1,595,000	June 2016	0.82	0.945	1,507,275	0.87
6 Grenadier Heights	1,989,000	2,185,000	August 2016		0.926	2,023,273	0.983
29 Grenadier Heights	1,800,000	2,302,000	June 2016		0.945	2,174,533	0.828
31 Grenadier Heights	3,432,000	2,950,000	April 2016		0.964	2,843,915	1.207
7 Riverside Crescent	2,030,000	2,495,200	October 2016		0.908	2,265,791	0.896
226 Riverside Drive	3,273,000	2,450,000	February 2015		1.126	2,758,720	1.186
279 Riverside Drive	2,443,000	2,812,500	September 2015		1.039	2,921,478	0.836
16 Wendigo Way	2,538,000	2,850,000	June 2016		0.945	2,692,189	0.943
7 Harcroft Road	2,725,000	3,000,000	November 2016		0.899	2,698,067	1.01
2 Dacre Crescent	3,297,000	3,250,000	November 2015		1.016	3,452,371	0.955
MEAN				0.92			0.97
MEDIAN				0.90			0.96

39Based on the data in the above table the Board determines a median ASR of 0.96 and a mean ASR of 0.97, for the 18 properties. The Board rejects the Appellant’s choice of the median ASR value of 0.90 as the ASRs were calculated using sale values that were not time adjusted.

40The Board notes that the calculated median ASR of 0.96 falls within MPAC’s IAAO standard range between 0.90 – 1.10, suggesting no equitable adjustment is necessary. Therefore, the Board finds that no equitable reduction is required.

DECISION

41The current value of the Subject Property is $2,974,000 for the 2017 to 2019 taxation years.

42An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.