Assessment Review Board / Commission de révision de l’évaluation foncière

ISSUE DATE: March 14, 2019

FILE NO.: WR 157742

Assessed Person(s): James Edwin Crane and Lisa Michelle Crane

Appellant(s): James Edwin Crane and Lisa Michelle Crane

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 23

Respondent(s): Township of Malahide

Property Location(s): 50890 Yorke Line

Municipality(ies): Township of Malahide

Roll Number(s): 3408-014-010-03500-0000

Appeal Number(s): 3273456 and 3312163

Taxation Year(s): 2017 and 2018

Hearing Event No.: 707171 and 709469

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

Heard: November 27, 2018 in London, Ontario and December 5, 2018 by telephone conference call

APPEARANCES:

Parties	Counsel⁺/Representative
James Edwin Crane and Lisa Michelle Crane	James Edwin Crane
MPAC	Ian Johnstone⁺
Township of Malahide	Suzanna Dieleman

DECISION OF THE BOARD DELIVERED BY JOANNE LAWS AND ROBERT WRIGHT

OVERVIEW

1James Edwin Crane and Lisa Michelle Crane (the “Appellants”) are the owners of the lands at 50890 Yorke Line, Malahide Township, Ontario (the “Subject Property”), which is identified by assessment roll number 3408-014-010-03500-0000. The Subject Property is 50 acres of vacant farm land.

2The Appellants filed an appeal of the assessment of the Subject Property with the Assessment Review Board (the “Board”) for the 2017 taxation year. They have been deemed to have brought the same appeal for the 2018 taxation year pursuant to section 40 of the Assessment Act, R.S.O. 1990, c.A. 31 (the “Act”).

3The Appellant, James Edwin Crane, and related parties, filed assessment appeals for three other properties in Malahide Township. They are located at 15175 Helder Road, 14508 Putnam Road, and 50176 Wilson Line. The hearing proceeded on the basis that the Board’s decision would only deal with the assessment appeal concerning the Subject Property.

4The in-person hearing in London, Ontario, on November 27, 2018 was followed by oral submissions by way of telephone conference call (“TCC”) on December 5, 2018. Later on December 5th, MPAC delivered to the Board and the Appellants by email copies of the cases that it relies upon and referred to in its oral submissions.

5Pursuant to s. 19 of the Act, the assessment of land shall be based on its current value. The “current value” is defined as “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.” The Act also provides in s. 19.2(1)4 that, for the 2017 to 2020 taxation years, land is valued as of January 1, 2016. Section 19(5) of the Act directs that the current value of farm lands and buildings used only for farming, such as the Subject Property, shall be determined by only considering their use for farm purposes and by not considering sales of lands and buildings to persons whose principal occupation is not farming.

6MPAC returned an assessment of $711,000 for the 2017 taxation year. In preparing for this hearing, MPAC made two adjustments to the assessed value. The first was an 8% market reduction which was applied to all farm lands in the vicinity of the Subject Property. The second was to adjust the soil classification of the Subject Property from 46 acres of Class 2 land and 4 acres of Class 4 land to 32 acres Class 2 land and 18 acres Class 3 land. These adjustments resulted in an assessed value of $631,000 which MPAC applied to the 2018 taxation year and is recommending as the current value for both taxation years.

7The Appellants’ position is that MPAC’s assessment of current value is too high and that the correct current value is $500,000.

8Pursuant to s. 40(11) of the Act, the Township of Malahide is a party to this proceeding. Its representatives observed the hearing and listened to the subsequent oral submissions, but it did not present evidence, makes submissions, or take a position on the issues raised in this appeal.

9Section 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 (an “equitable reduction”). The Appellants do not specifically address the issue of an equitable reduction, and MPAC takes the position that an equitable reduction is not required.

10At the completion of the in-person hearing and oral submissions the decision was reserved. For the reasons that follow, the Board finds that for the 2017 and 2018 taxation years, the current value of the Subject Property as of the January 1, 2016 valuation day is $550,000. The Board finds that an equitable reduction of the current value is not required.

Relevant Legislation

11The Act provides

1. (1) Definitions. -- In this Act,

“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.

20. (5) Farm lands and buildings For the purposes of determining the current value of farm lands used only for farm purposes by the owner or used only for farm purposes by a tenant of the owner and buildings thereon used solely for farm purposes, including the residence of the owner or tenant and of the owner’s or tenant’s employees and their families on the farm lands,

(a) consideration shall be given to the current value of the lands and buildings for farm purposes only;

(b) consideration shall not be given to sales of lands and buildings to persons whose principal occupation is other than farming;

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:

4. For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

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.

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

12The issues to be determined on this appeal are:

1. The correct current value of the Subject Property for the 2017 and 2018 taxation years; 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 the reduction should be.

What is the correct current value of the Subject Property for the 2017 and 2018 taxation years.

Evidence

13The Board first heard the evidence of MPAC’s two witnesses, followed by the evidence of the Appellants’ sole witness.

14Mr. Ian Johnstone was counsel for MPAC. MPAC sought to qualify Corinne Van Raay and Wayne Williams as experts on farm valuations and assessments.

15Ms. Van Raay has worked for MPAC for the past 13 years, beginning as a property inspector and then working as property valuation analyst. Much of her work has related to farm properties. She had previously been qualified by the Board in other hearings to give evidence on the valuation of two residential properties and one farm property. The Appellants did not oppose MPAC’s request to qualify Ms. Van Raay as an expert witness. The Board considered Ms. Van Raay’s experience and qualifications and qualified her to give expert evidence on property valuations generally.

16Ms. Van Raay, assisted by Mr. Williams, prepared a Valuation Report for the Subject Property dated February 27, 2018, and an Equity Analysis Report.

17The Valuation Report describes the area where the Subject Property is located as a “unique region formerly known as Old South Dorchester”, and that:

The area consist mainly of class 1 and 2 farm land used primarily for the production of feed and grain cash crops. There is a mixture of small, medium, and large scale farm operations in this area. There is a significant contingent of large scale hog, dairy, poultry and cash crop operations. Large scale farm operations continue to expand in this area which has influenced farm land values in the area.

18Ms. Van Raay said that Mr. Crane had met with MPAC staff in 2016 and that she had inspected the Subject Property with Mr. Williams on two occasions in 2017. Ms. Van Raay said that she verified that the data on the Subject Property was current and complete and that its classification had been reviewed.

19Ms. Van Raay’s evidence was that there has not been a recent arm’s length sale of the Subject Property and that it was valued using the cost approach.

20Ms. Van Raay testified that there had been 149 requests for assessment reconsiderations in the vicinity of the Subject Property in 2017, which resulted in an across-the-board reduction of 8 per cent of only the farm land portion of those properties. MPAC made a further reduction to reflect an adjustment to the soil classification as discussed above.

21MPAC relied upon six farm sales to support its recommended assessed value. These sales occurred between 2013 and 2016 and are farmer to farmer sales of vacant farm land on the open market, in the former Old South Dorchester. For the purpose of adjusting the sale values to the January 1, 2016 valuation day, Ms. Van Raay submitted a time adjustment study which included 335 sales of improved and vacant farm land which occurred from January 2013 to December 2016 in the vicinity of the Subject Property. Ms. Van Raay submits that the sales indicate there was a 6% increase per annum in farm values during this 48 month period.

22Four of MPAC’s sale properties are Class 1 farm lands. Sale 1, 1781 Avon Drive, has 49.26 acres and sold in November 2013 for $750,000. Sale 2, 47738 Yorke Line, has 50.53 acres and sold in February 2014 for $900,100. Sale 3, 12500 Empey Road, has 63.37 acres and sold in April 2013 for $1,235,000. Sale 6, 51765 Lyons Line, has 48.61 Class 1 farm land and 1 acre of Class 4 farm land and sold in April 2013 for $950,000. The prices paid per acre for these properties are $15,225, $17,813, $19,488 and $19,149, respectively. The time adjusted prices paid per acre are $17,230, $19,751, $23,484 and $23,075, respectively.

23The remaining two properties are Class 2 farm lands. Sale 4, known as Avon Drive with the roll number 3408-014-100-1600-000, has 37.99 acres of Class 2 farm land and 1 acre of Class 6 farm land and sold in December 2015 for $520,000. Sale 5, 7119 Pigram Road, has 30 acres of Class 2 farm land and sold in April 2016 for $450,000. The prices paid per acre are significantly less than the four Class 1 farm land sales: $13,354 and $15,000 respectively. The time adjusted prices paid per acre for these two properties are $13,367 and $14,743, respectively.

24Ms. Van Raay testified that MPAC applied the cost approach in determining the assessed value of this property. However, as there are no buildings or other improvements to the land, it is, in effect, a direct comparison approach to land values.

25On cross-examination by Mr. Crane on specific issues regarding comparable property values and soil conditions, Ms. Van Raay deferred to the evidence to be given on MPAC’s behalf by Mr. Williams.

26Mr. Williams is a member of the Institute of Municipal Assessors and became a property assessor for the Guelph Regional Assessment Office in 1989. Since 2006 he has been the MPAC Senior Valuation Analyst/Property Valuation Specialist, Farm Properties for Kitchener, London, Sarnia, and Windsor. He said that he has been previously qualified as an expert witness in farm valuation matters in two ARB hearings and as a valuation expert in several hundred hearings. The Appellants did not oppose MPAC’s request to qualify Mr. Williams as an expert witness in farm property valuations, and he was so qualified by the Board.

27Mr. Williams testified that he “walked” the Subject Property, went to the properties that the Appellants propose are comparable, and conducted a sales investigation of “true sales” of farms purchased by a farmer in the vicinity of the Subject Property. He testified that he assisted with the preparation of the Valuation Report, did all of the initial valuations of MPAC’s comparable properties, and reviewed the Equity Analysis Report.

28At the hearing MPAC filed a Supplementary Materials brief that Mr. Williams also assisted in preparing and that he referred to extensively in his evidence. This document summarizes MPAC oral testimony given at the hearing. The brief includes an analysis of MPAC’s sales investigations, the criteria used when selecting farm comparable properties, the original vs. adjusted land rates per soil class in Malahide Township, the total number and size of all of the properties owned in whole or in part by the Appellants in Malahide and neighbouring townships (these total over 700 acres), and the farm sales questionnaire used to obtain data for the sales investigation referred to above. The Appellants did not object to the filing of the Supplementary Materials brief.

29Mr. Williams testified that the criteria that MPAC used to select comparable farm properties are:

• vacant farm land with no buildings;
• farmer to farmer sales;
• exposed to the market in some way-newspaper, tender, real estate listing, signs in public notifying community of the listing of the property for sale-i.e., in a restaurant, stores, etc.;
• within the same municipality;
• within shoulder years (2012-2016);
• farm size adjustment;
• whether there are any adjoining parcels to consider;
• soil classifications;
• FFE-20 acres per ownership within the same municipality;
• Whether the sale was to a family member;
• Whether the sale had unconventional financing;
• Whether the sale was forced-bankruptcy, estate sale, etc.;
• Motivations behind the sale are of upmost importance and can deem the sale invalid if not considered a true arms-length sale.

30Mr. Williams’ evidence focused upon responding to the Appellants’ suggested comparable properties and soil classifications of the Subject Property.

31Mr. Crane represented the Appellants. He is also one of the Appellants and was their only witness.

32Mr. Crane did not seek to be qualified as an expert witness. However, he said that he is very knowledgeable about farm property values in the former Old South Dorchester and its vicinity. He has lived there his whole life and grew up on his uncles’ farms. As already noted, he owns an interest in several other farms of various sizes, in addition to the four properties whose assessments are under appeal. In total he has an ownership interest in over 700 acres of land in Malahide Township and its neighbouring townships. Mr. Crane said that he does not often sell a property and that he still owns the first farm that he purchased in 1976. Mr. Crane testified that he has taken a great interest in the value of farm land his entire life.

33Mr. Crane identified two properties that he believes are good comparisons with the Subject Property, particularly because of their soil characteristics and proximity. He referred to them as the “Dawson” properties after the name of their owner. He questioned why MPAC excluded them from its Valuation Report.

34The first of the Appellants’ suggest comparable properties is 51145/51230 Yorke Line, Malahide Township with roll no. 3408-014-010-07401-0000 (“51145 Yorke Line”). This property has a brick veneer home built in approximately 1970, a small four stall horse barn, and an attached garage. In December 2016 it sold for $576,000. He says that the house and barn and two acres of land are in the process of being severed and sold. He believes that they would sell for approximately $300,000 in this area. He says that the asking price for the remaining 48 workable acres of very hilly land is $450,000, but that price is negotiable. His information is that there have not been any offers although the asking price is less than $9,000 per acre. He added that premium farm land in the area might sell for double the price.

35The second comparable property described by Mr. Crane is also on Yorke Line, with roll no. 3408-014-010-07400-000 (property “07400”). It was a 100 acre parcel but the house and barn, and just under two acres of land, were severed. His evidence was that the whole parcel sold for $660,000 in 2011 and that the smaller severed parcel with the structures sold for $259,000, less than two years ago. The asking price for the remainder of the property, approximately 98 acres, is $985,000. He calculated that this works out to an average of about $10,500 per acre for the workable land and $2,000 per acre for the bush land. He says that the workable land has a higher value than that of 51145 Yorke Line because 50 acres of 07400 is much flatter land and, therefore, easier to farm.

36The MPAC Supplementary Materials and Mr. Williams’ oral evidence specifically addressed the Appellant’s two comparable properties. Mr. Williams’ opinion is that neither of the Appellants’ suggested comparable properties should be used to determine the Subject Property’s current value because they do not meet MPAC’s criteria.

37Regarding 51145 Yorke Line, MPAC’s evidence was that the property had been on and off the market for about five years and had originally been listed at $650,000. It sold in December 2016 for $576,000. Mr. Williams called this a “forced” sale because the purchaser said that the vendor had run into financial difficulty. He said for that reason the sale does not meet the MPAC criteria and it was not used as a comparable property. He said that it is currently assessed at $11,984 per acre. He added that the current owner accepted minutes of settlement in 2018 for $786,000 and concluded that the current owner must feel that this is a fair value for the property.

38Regarding the Appellants’ second comparable property, 07400, Mr. Williams testified that the property was not used by MPAC as a comparable because MPAC only used vacant land sales and the farm house had not been severed at the time of the previous sale. He said that it is currently assessed at $11,984 per acre. He added that the current owner accepted minutes of settlement in 2017 for $1,170,000 and concluded that the current owner must feel that this is a fair value for the property.

39Regarding the quality of the Subject Property for farming purposes, Mr. Crane described the front 10 acres as being “very hilly” and the back 12 acres as being composed of “black muck”, which, despite some tiling, has drainage problems that he believes would cost several thousand dollars to fix. He testified that despite very good farm practices the terrain and soil of the Subject Property do not allow for a high yield for grain crops compared to neighbouring farms, including MPAC’s suggested comparable properties with Class 1 soils.

40Mr. Williams testified that he discussed the Subject Property’s soil and terrain with Mr. Crane regarding its assessment and that they were taken into account in MPAC’s recommended assessment of $631,000.

Submissions

41MPAC submits that the correct current value of the Subject Property for the 2017 and 2018 taxation years is $631,000. The Appellants submit that the correct current value is $500,000.

42MPAC argues that its estimate of current value has taken into account: the across-the-board 8 per cent “market” reduction of the current value of farms in the former Old South Dorchester; a change in the soil classification of 18 acres of the Subject Property from Class 2 to Class 3 to reflect an area of poorer quality; and a recent year-long review of 335 relevant property sales from which six comparable properties were selected.

43MPAC referred to case law that it submits support the nature and application of its assessment criteria.

44The Appellants do not challenge MPAC’s criteria and supporting case law, just their application to the Subject Property and to the Appellants’ comparable properties. They argue that the Valuation Report does not consider the two best comparable farm properties in Old South Dorchester, 51145 Yorke Line and 07400. They submit that Mr. Crane has provided evidence of the value of these properties based on their vacant land values and that they therefore meet MPAC’s criterion. The Appellants submit that their two comparable properties provide a more accurate measuring stick for the Subject Property’s current value than MPAC’s suggested comparable properties.

45MPAC submits that the Appellants’ two comparators should not be used because they do not meet MPAC’s criteria, and, in the alternative, that the minutes of settlement for those properties are the best evidence of the Subject Property’s value.

46The Appellants argue that the minutes of settlement are not good evidence of the current values of those properties because their owner might have agreed to a higher value for personal reasons, e.g., wanting a quick resolution due to poor health. Mr. Crane said that he only found out about the minutes of settlement from MPAC’s witnesses at the hearing.

47The Appellants also argue that MPAC has not sufficiently considered the Subject Property’s less desirable soil and terrain. They submit that the Subject Property is difficult to farm because it is on a ridge, does not have the best soil conditions, and that no one would buy the Subject Property at its assessed value.

48MPAC submits that the Subject Property’s soil quality and elevations were taken into account and that there is no evidence that the Subject Property would sell for less than the assessed value. Mr. Crane argues that the Subject Property has a ridge that makes it undesirable to the large scale farm operations which translates to a lower value.

49The Appellants argue that the real issue is price and that the Subject Property would not sell for the amount at which it has been assessed by MPAC because “big farm purchasers” want to buy premium farm land and not those with Class 2 and 3 soil with “mucky and hilly” areas, like the Subject Property. The Valuation Report acknowledges: “Large scale farm operations continue to expand in this area which has influenced farm land values in the area.” The Appellants submit that the Subject Property would only sell for approximately $10,000 per acre and not for the assessed value of $12,620 per acre. The Appellants assert: “The bottom line is all land is not equal.”

Analysis and Findings

50The Appellants’ two main points of contention in respect of current value are the appropriate comparable properties and whether the quality of the Subject Property’s soil and terrain have been adequately factored into the determination of current value by MPAC.

51There has not been a recent open market sale of the Subject Property, which would be the best indicator of its current value on the valuation day.

52Of the six properties that MPAC identifies as being comparable to the Subject Property, the Board finds that property nos. 1, 2, 3 and 6 are not sufficiently similar to the Subject Property to be a good measure of its current value. Those properties are Class 1 lands and are, therefore, superior to the Subject Property. Their sale prices per acre, both actual and time-adjusted, reflect this.

53Properties no. 4 and 5 in MPAC’s Valuation Report are Class 2 land. Property 4 has one acre of Class 6 land but, unlike the Subject Property, neither have any Class 3 land. As a result, these properties are also superior to the Subject Property. The Subject Property would likely sell for less than their time-adjusted sale values per acre of $13,367 and $14,735.

54The next question is whether the two properties suggested by the Appellants are helpful in determining the current value of the Subject Property. The Appellants assert that the properties 51145 Yorke Line and 07400 have values of $9,000 and $10,500 per acre, respectively, which is below the Subject Property’s assessed value of $12,642 per acre.

55MPAC’s argument is that 51145 Yorke Line is not a valid comparable property because its value is based on a “forced” sale as the previous owner had run into financial difficulty. This would be contrary to one of MPAC’s criteria. However, it is also MPAC’s evidence that the property was originally listed for $650,000 and sold for $576,000, and it had been on and off the market for about five years. There was not an extraordinary difference between the listing and sale price and the property was on the market for a number of years. This evidence is more consistent with an open market sale than a “forced” sale. The Board finds that it has not been established that the sale of this property was a forced sale, and so it should not be excluded as a comparable sale on that basis.

56MPAC’s alternate argument is that the property’s assessed value should be considered on the basis of recent minutes of settlement. The current owner and MPAC entered into minutes of settlement for this property in 2018 for an assessed value of $786,000. MPAC’s Supplementary Materials state this indicates “what the current owner feels is a fair value for this property.” The Board does not agree with this statement as that is an assumption as to the owner’s state of mind and there is no direct substantiating evidence. There are many reasons why parties may wish to settle the assessed value of a property. The parties may wish certainty and to avoid the time and expense of gathering evidence and participating in a hearing. A settlement might simply be a “saw-off” of the parties’ real positions and opinions of value. The minutes of settlement are not a sale, and, therefore, are not the best evidence to determine current value.

57Likewise, MPAC did not include 07400 as a comparable property because at the time of its most recent sale it did not meet MPAC’s criteria as vacant farm land. A house and barn, on just over one acre of the property, were severed after the sale. In the alternative, MPAC argues that the current owner and MPAC also entered into minutes of settlement for this property in 2017 for an assessed value of $12,844 per acre for the vacant farm land portion. MPAC again states that the current owner felt that the settled amount was fair value. For the same reasons as discussed above, the Board does not agree with MPAC’s arguments.

58The Board has to determine if MPAC correctly excluded this property as a comparable or whether the Appellants’ estimate of value for the vacant farm land portion of the property should be accepted as some evidence of the current value of the Subject Property.

59The Appellants argue that the vacant farm land portion of this property can be valued separately at $10,500 per acre. This is based on there having been a recent sale of the severed portion of the former property (approximately two acres with the structures) and the current asking price for the remaining vacant farm land.

60Mr. Crane’s evidence and the Appellants’ submissions regarding the Appellants’ two suggested comparable properties are persuasive. Mr. Crane has special knowledge through experience of farm values in the unique region of the former Old South Dorchester. He has an ownership interest in several farms in Malahide Township and the surrounding municipalities and follows sales activities, including listings. Although he did not seek to be qualified as an expert witness, he is a life-long resident of the area and clearly has first-hand knowledge of farm values. The Board finds that based upon Mr. Crane’s personal experience his information and belief as to the value of vacant farm land in the unique area of the former Old South Dorchester should be given weight.

61The two properties that the Appellants have put forward as comparable sales were excluded from MPAC’s Valuation Report because, in MPAC’s view, they did not meet its criteria. The Board has found that the property at 51145 Yorke Line does meet the criteria. It is the same size as the Subject Property but it is superior to it because it is entirely Class 2 land and it is improved with a house and other farm buildings. The sale occurred very close to the valuation day which provides a good indication of the market at that time without applying time adjustments. The non-time-adjusted sale price per acre is $11,520. The Board finds that the Subject Property would likely not sell for more than this superior property.

62MPAC has utilized the Direct Sales Comparison Approach to support its assessed value of the Subject Property. This is not a complicated analysis beyond the ability and knowledge of Mr. Crane. However, the Board finds that it cannot assign much weight to the Appellants’ evidence of a listing for the vacant land portion of 07400. A listing is not the same as a market tested and arm’s length sale. Such a sale of the vacant land portion of this property has not yet occurred.

63The last sale of 07400 occurred in April 2011. While MPAC’s evidence is that there was a 6% increase in the market from 2013 to 2016, MPAC failed to provide their time adjustment factors, nor did their analysis include time adjustments for 2011. The Board has insufficient evidence to conclude how this 2011 sale might reflect the Subject Property’s current value as January 1, 2016.

64The Board finds that of the two sales presented by the Appellant for the Subject Property, only 51145 Yorke Line can be used to determine the current value of the Subject Property.

65Based on the above, the Board finds that the most comparable sale properties are MPAC’s comparable property numbers 4 and 5 and the Appellants’ suggested property at 51145 Yorke Line. The range of sale values of these properties is $11,520, $13,364 and $14,735 per acre. The Board finds that all three are superior to the Subject Property and, as such, the Subject Property would sell for less than the lowest sale value of $11,520 per acre. However, the Board was not provided with any evidence of similar lands or inferior lands. Such evidence would provide a more accurate indication of current value. In light of the above, the Board finds that a reasonable current value is $11,000 per acre. Applying this value to the Subject Property results in a value of $550,000. This is the current value of the Subject Property.

Whether there should be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be.

Evidence and Submissions

66The Appellants did not bring any evidence or direct their submissions specifically to the question of whether an equitable reduction is required.

67Ms. Van Raay’s Equity Report includes an Assessment to Sales Ratio (“ASR”) study of 24 farm properties in the Township of Malahide which sold from January 1, 2012 to February 27, 2018.

68Ms. Van Raay testified that MPAC’s equity analyses use a more stringent Level of Appraisal (“LOA”) range for the median ASR of a relevant group of properties, 0.95 to 1.05, than the International Association of Assessing Officers (“IAAO”) standard which is 0.90 to 1.10.

69Ms. Van Raay’s analysis also considered appraisal uniformity among individual properties. The average percentage deviation from the median ASR is called the Coefficient of Dispersion (COD). She says this number should be not more than 20 for income producing properties and not more than 25 for vacant land. The results of the analysis in this case are as follows:

Sales Count	LOA/ASR	Target LOA	LOA within Target LOA	COD
24	0.98	0.95-1.05	Yes	22.0

70Based on the above analysis, that the Subject Property’s LOA/ASR is within the target LOA range and the COD is within the range for vacant land, MPAC’s expert evidence is that similar properties in the vicinity of the Subject Property have been assessed at or near their current values and, therefore, an equity adjustment is not required to the Subject Property’s assessed value.

71MPAC submits that an equitable reduction of the current value of the Subject Property for the 2017 to 2018 taxation years is not required.

Analysis and Finding

72The goal of the Act is to determine the correct current value. As any equitable reduction is an adjustment of the correct current value, such a reduction should only be made where it is clearly supported by the evidence.

73In making its determination of any equity reduction, the Board must be convinced by the best evidence available that the reduction is warranted. The evidence presented indicates that MPAC’s model is assessing properties very near their market values.

74Based on the evidence presented, the Board finds that an equitable adjustment to the current value of the Subject Property is not required.

DECISION

75The correct current value of the Subject Property is $550,000 for the 2017 and 2018 taxation years.

76An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.

77Accordingly, the assessment is reduced from $711,000 to $550,000 for the 2017 taxation year and from $631,000 to $550,000 for the 2018 taxation year.