Constantine Zygoumis v. Municipal Property Assessment Corporation, 2019 CanLII 14351

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

February 21, 2019

FILE NO.:

WR 156143

Assessed Person(s):

Constantine Zygoumis

Appellant(s):

Constantine Zygoumis

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”)

Region 03

Respondent(s):

City of Ottawa

Property Location(s):

6 Craigmohr Court

Municipality(ies):

City of Ottawa

Roll Number(s):

0614-120-655-53426-0000

Appeal Number(s):

3262861 and 3289557

Taxation Year(s):

2017 and 2018

Hearing Event No.:

705166

Legislative Authority:

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

Heard:

September 17, 2018 by telephone conference call

APPEARANCES:

Parties

Representative

Constantine Zygoumis

Glen Lucas and Garth Allen

MPAC

Katherine Kennedy-Boisvert

City of Ottawa

No one appeared

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1The subject property, located at 6 Craigmohr Court, has an assessment of $1,433,000 for the 2017 and 2018 taxation years. Constantine Zygoumis (the “Appellant”) believed this assessment was too high and filed an appeal. He was represented at the hearing by Glen Lucas and Garth Allen. The Appellant believes the assessment should be less, based on a comparison to other properties.

2MPAC conducted an inspection of the property on May 8 2018. The inspection resulted in an a number of adjustments to characteristics of the property that have an impact on its value:

• an adjustment to interior data, including the presence of a fire place, a full bath, and finished basement area;

• an adjustment in the subject property’s quality rating; from 8.5 to 8.0.

3These adjustments resulted in a value of $1,306,000. MPAC submitted this as a recommended value for the Assessment Review Board (the “Board”) to consider.

4The Board must decide two things in these appeals. Firstly, the Board must determine the current value of the subject property. Once that decision is made, the Board must then determine if the current value found needs to be reduced for the purpose of equitable assessment.

DECISION

5The Board finds the current value of the subject property is $1,077,000. The Board also finds that there is no evidence to support a reduction in this amount in order to make it equitable with the assessments of similar lands in the vicinity.

6Accordingly, the assessment of 6 Craigmohr Court for the 2017 and 2018 taxation years is reduced from $1,433,000 to $1,077,000, in the Residential property class.

LEGISLATION

7In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act (the “Act”).

8Section 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.

9Section 19.(1) of the Act states:

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

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.

What is the Current Value of the Subject Property?

MPAC’s Evidence

11MPAC submitted a valuation report that considered seven properties in Ottawa that it deemed to be comparable with the subject property. These seven properties are located from 0.07 to 5.19 kilometres from the subject property. They are all single family dwellings with two storeys. They sold between July 2013 and September 2017 for prices ranging from $720,000 to $1,070,000.

12As the subject property is the largest dwelling among it and the five proposed comparable sales, MPAC submitted that a value that is higher than the sale values of the 11 proposed comparable sales is reasonable. Using this approach, MPAC arrived at a value for the subject property of $1,433,000. This value was adjusted as a result of the May 2018 inspection. MPAC recommends a value of $1,306,000.

Appellant’s Evidence

13The Appellant submitted that there are only two properties in evidence that should be used for comparison to the subject property; MPAC’s comparable 2 and comparable 3, adding that all the other properties are too far away for the subject property to be reliable for comparison.

14Specifically, the Appellant relied on the per square foot, time adjusted, sale values ($205.92 for comparable 2 and $248.01 for comparable 3) of these two properties to arrive at a median value of $ 226.97. The Appellant submits that when applied to the 5,228 square feet of living area at the subject property, the indicated value is $1,186,599 or $1,186,000, rounded.

Board’s Analysis

15The best evidence of current value is a sale of the subject property that occurred on or near the applicable valuation day. In the absence of such a sale, the next best approach to determining current value is the comparison of the subject property to other properties that have sold in proximity to the valuation day.

16The Board has 11 sales in evidence to consider, as reflected in MPACs list of comparable properties. The two properties cited by the Appellant are included in MPAC’s list. In making comparisons to the subject property, the Board noted important differences between it and the comparable properties.

17The characteristics of location, age, condition, and size are the most important when comparing properties to one another. In addition, the proximity of the sale date to the valuation day is important in demonstrating the reliability of the sale value. In this case, the Board finds as follows:

• The subject property has 5,228 square feet of living area. The Board disregards MPAC’s 3, 4, 6, 8, 9, 10 and 11. These seven properties have living areas of 3,116 to 3,547 square feet and are too small to be meaningfully comparable to the subject property.

• The subject property was built in 1992. The Board disregards comparable 5 as it was built in 2011, representing too much of an age difference to meaningfully compare it to the subject property.

• Comparable properties 1 and 7 are 4.5 and 5.2 kilometres from the subject property respectively. The Board disregards these two properties as the large distance from the subject property makes them unreliable comparisons with respect to location.

18The Board finds that the best comparison of current value for the subject property is with comparable 2. It is less than 100 metres from the subject property, on the same street, and was built in 1997. It has a total living area of 4,111 square feet and sold in May of 2015 for $840,000. The time adjusted sale value of comparable 2 is $846,520. When this value is divided by its square footage, that value is $205.92.

19When this per square foot value is applied to the subject property, to account for the disparity in the size of the two dwellings, the result is $1,076,550.

20The Board finds that the current value of the subject property is $1,077,000 (rounded).

Is a reduction in the current value necessary to achieve equitable assessment when reference is made to the assessments of similar properties in the vicinity?

21The Appellant did not make a specific submission on the question of equity of assessment, but took issues with the inclusion of the number of properties that lie outside of the “Bi6” neighbourhood designated by MPAC and suggested that some of the properties in MPAC’s analysis could be considered outside of the ‘vicinity’ of the subject property.

22MPAC submitted an equity analysis that compared the time adjusted sale value of 30 single family dwellings in the vicinity of the subject property with their corresponding 2017 assessments. Comparisons of such assessments and time adjusted sale values are a common means of determining if similar properties in the vicinity are equitable assessed. The comparison of these assessments to time adjusted sale values is called the Assessment to Sale Ratio (“ASR”). The range of ASRs in MPAC’s sample was 0.819 to 1.422, with a median of 1.087.

23According to MPAC, no adjustment to the current value determined is required because the median ASR falls above 1.00 which indicates that similar properties in the vicinity are being assessed above their current value, based on sales.

Board’s Analysis

24The concept of reducing the current value determined to make the subject property’s assessment equitable with that of similar properties in the vicinity requires the Board to change a correct assessment finding to one that is incorrect to make it fair and equitable. Adjustments for this purpose cannot therefore be made without compelling evidence to do so.

25MPAC’s equity analysis indicates that, when the assessments of 30 similar properties in the vicinity of the subject property are compared with their time adjusted sale values, the result shows that properties are generally assessed above their current value. MPAC relies on a median ASR to decide if the current value of a property should be reduced to arrive at an assessment that is equitable.

26In making its determination of any equity reduction, the Board must be convinced, by the best evidence available that the reduction is warranted. The Board finds that the mean ASR using all properties in evidence is the best evidence of whether or not a reduction in current value is required for the purposes of equitable assessment. Using MPAC’s sample of 30 properties (including the 11 properties in its valuation report) the results are:

• Mean ASR – 1.111

• Standard Deviation - 0.141

• 95% Confidence Range - 0.050

• Low End of the Confidence Range – 1.060

• High End of the Confidence Range – 1.161

27These results indicate that it is highly likely that similar single-family dwelling properties in the vicinity are generally assessed above their current value. Based on this sample, the Board can be 95% sure that the true average level of assessment of similar properties in the vicinity is between 106% and 116% of their current values. That is strong evidence that similar property in the vicinity is, on average, assessed above its current value.

28Section 44.(3)(b) is clear that adjustments can only be made for equity if “such an adjustment would result in a reduction of the assessment of the land.” Making the assessment of the subject property equitable with similar property in the vicinity would require increasing the assessment. Therefore, no adjustment to the current value determined is necessary for the purposes of equitable assessment.

CONCLUSION

29The Board finds the current value of the subject property is $1,077,000. The Board also finds that there is no evidence to support a reduction in this amount in order to make it equitable with the assessments of similar lands in the vicinity.

30Accordingly, the assessment of 6 Craigmohr Court for the 2017 and 2018 taxation years is reduced from $1,433,000 to $1,077,000, in the Residential property class.