Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 17, 2019

FILE NO.: WR 157543

Assessed Person(s): A.V-F.

Appellant(s): A.V-F.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): City of Toronto

Roll Number(s): Withheld

Appeal Number(s): 3288583

Taxation Year(s): 2017

Hearing Event No.: 708565

Legislative Authority: Section 323.(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11. Sched. A

Heard: December 5, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative/Counsel⁺
A.V-F.	Self-represented
City of Toronto	G. Thomson⁺ and L. Verastegui

DECISION OF THE BOARD DELIVERED BY MARGARITA OKHOVATI

INTRODUCTION

1A.V-F., (the “Applicant”) is a 59-year old divorced woman who lives alone in a condominium townhouse that has three bedrooms, one-and-a half bathrooms, a partially finished basement, and a garage. The subject property was purchased on April 16, 1999 for $123.000. In 2017, the subject property was assessed for $406,000.

2The Applicant filed this application with the City of Toronto (the “City”) seeking a cancellation, reduction or refund of property taxes for the 2017 taxation year on the basis that she was unable to pay her property taxes due to sickness or extreme poverty, pursuant to s. 323(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c.11, Sched. A. (the “Act”).

ISSUE

3The issue before the Assessment Review Board (the “Board”) is to determine whether the property taxes of the Applicant for the 2017 taxation year should be cancelled, reduced or refunded as a result of the Applicant’s inability to pay due to sickness or extreme poverty under the Act.

DECISION

4Based on the evidence before it, the Board determines that the Applicant’s 2017 property taxes should not be cancelled, reduced or refunded notwithstanding her sickness. The Board therefore, dismisses this application.

REASONS FOR DECISION

Legislation

5Section 323(1)(e) of the Act provides:

Upon application to the city treasurer made in accordance with this section, the City may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(e) the applicant is unable to pay taxes because of sickness or extreme poverty;

6The Act outlines a two-part test. In order for the Applicant to qualify for relief under this section of the Act, the Board must first determine whether the Applicant is able to pay her taxes. If the Applicant was able to pay the 2017 taxes, then the application fails. If the Applicant proves that she is unable to pay the taxes, the Board must then determine the reason the Applicant is unable to do so. Relief can only be granted if the Applicant is unable to pay based on either sickness or extreme poverty.

EVIDENCE AND ANALYSIS

Applicant’s Evidence and Position

Ability to Pay

7In determining whether the Applicant has the ability to pay her taxes, the Board has to consider the evidence presented by the Applicant regarding her financial situation, which is not limited to her income and expenses. The Applicant submitted that in 2017, she was living in extreme poverty and was unable to pay her property taxes.

8The Applicant testified that she worked from 2004 to 2014 as a coordinator for Ontario Early Child Education. She stated that her job was abolished when full day kindergarten came into effect in 2014. From 2014 to 2016, she worked in a warehouse. The Applicant stated that she stopped working in 2016 when she became ill. The Applicant stated further that she receives financial help from her sister, mother and friends whenever she needs it.

Applicant’s Financial Evidence

9The Applicant submitted a copy of the Form 1 – Financial Information and also provided evidence at the hearing regarding her monthly income and expenses, assets and liabilities as detailed hereunder:

Income Total $1,098.42/month

Expenses a. Mortgage $ 734.95 b. Property taxes $ 179.00 c. Condominium fees $ 370.00 d. Heat $ 80.00 e. Hydro $ 50.00 f. Landline telephone/Internet $ 124.00 g. Cell phone $ 11.30 h. Groceries/household supplies $ 130.00 i. Car insurance $ 113.00 j. Gas/ car repair $ 35.00

Expenses Total $1,827.25/month

Net Total $- 728.83/month

Assets Market value of the subject property in 2017 $ 594,000.00 RRSP $ 1,352.00 Cash $ 654.98 Automobile $ 300.00

Assets Total $ 596,306.98

Liabilities Mortgage $ 97,000.00 Second mortgage $ 123,000.00

Liabilities Total $ 220,000.00

NET WORTH TOTAL $+ 376,306.98

10Based on the information set out above, the net worth of the Applicant is $376,306.98

Sickness

11The Applicant testified that in November 2016, she was hospitalized for two weeks with a kidney infection. She was readmitted in March and April 2017 with Klebsiella, a super bug. She also was diagnosed with a degenerating fibroid. The Applicant submitted letters from St. Michael and North York hospitals with respect to her illnesses, which support the Applicant’s sicknesses. The Applicant submitted that she was unable to pay her 2017 property taxes because of sickness.

Applicant’s Final Remarks

12“I was really sick in November 2016. When I received a letter from the City that they were going to auction my house, I explored the idea of renting out my house but was told it was illegal.”

City’s Evidence and Position

13Luis Verastegui, Revenue Analyst for the City, advised the Board that the Applicant has paid her 2017 property taxes for $2,148.05 in full, and she has also paid half of the 2018 taxes for $1,552.13. The outstanding taxes for 2018, is $784.81.

14Mr. Verastegui stated that based on the 2017 sales of similar properties in the subject property’s vicinity, the estimated market value of the subject property is $594,000.

Submissions

15Graham Thomson, Counsel for the City, submits that the City is not taking any position with respect to the Applicant’s sickness. He stated that the City is sympathetic to the Applicant’s situation however, the main issue is, whether the Applicant was able to pay her 2017 taxes. He stated that for the following reasons, this application has to be dismissed.

• The Applicant was able to pay her 2017 property taxes in full. In 2017, the Applicant was also able to pay all the outstanding taxes from 2008 to 2016.
• There is equity in the subject property. The assessed value of the subject property in 2017 is $406,000 and its market value is $594,000. In 2017, there were two charges against the subject property; the primary mortgage balance was $97,000. The equity allowed the Applicant to take out a secondary private mortgage with a value of $130,000 and this enabled her to pay all her outstanding property taxes.
• The Applicant lives alone in a three-bedroom house and has not explored the opportunity to rent out a room to generate more income.
• The Applicant receives substantial help from friends and family.
• In the Form 1 - Financial Information, the Applicant shows a deficit of $728.83 per month but there is no deficit shown in her bank account. The closing balance of her bank accounts as of December 2017 is $654.98.
• The Applicant has a RRSP for $1,352.00. She can use this to pay her property taxes.

Board’s Analysis

16The intent of the legislation is to provide relief for property owners who cannot pay their property taxes in full or in part due to sickness or extreme poverty in a given taxation year. If the Applicant proves an inability to pay the taxes, they must then prove the reason why they cannot, and only then can relief be granted.

17There is no dispute that the Applicant is sick. The Applicant presented letters from her physicians, which corroborate her sickness. The Board finds that sickness exists. The main question to be determined is, if the Applicant had the ability to pay her 2017 taxes.

18An ability to pay requires individuals to demonstrate that, after having called upon every resource available to them, and having explored every reasonable opportunity to mitigate any financial stresses, there are no means to pay some or all of their property taxes.

19The Board has considered the oral testimony of the Applicant, and has reviewed all of the evidence pertaining to her financial situation, to determine whether the Applicant is able to pay her 2017 property taxes.

20The Board finds that the Applicant had the ability to pay her 2017 taxes.

21Counsel for the City stated that in 2017, there were 16 deposits in the Applicant’s Bank of Nova Scotia account for a total amount of $4,529.69. This averaged $377.42 per month. The Applicant’s 2017 property taxes are $179.00 per month. The Applicant was questioned about the deposits. She stated that her mother and sister assist her with most of her expenses. The Board also notes that the Applicant receives $670.70 from Ontario Works, $69.00 from federal government, and $70.91 from the Ontario provincial government as a tax credit.

22Furthermore, the Board notes from the Applicant’s submitted documents that she received $111,440 as a second mortgage. After paying all the expenses, the balance became $23,584.69. The Applicant was questioned as to what happened to that money. She stated that the lending company held it in order to pay the future mortgages. She was asked whether she has any documents in this respect, she stated that she did not.

23Moreover, when Counsel asked the Applicant why she does not rent out a room to help her financially, the Applicant stated first that her house is in a bad situation and later she said that it is illegal to rent out in Scarborough without stating the source of the information.

24Furthermore, the documents show that every month the Applicant has paid the mortgage on the house in the amount of $734.95. The Board finds that the property taxes of $179.00 per month should have been paid first. An ability to pay the mortgage shows some ability to pay her taxes.

25In addition, the Board notes from the Applicant’s bank accounts that the balance in her accounts as of December 2017 is $654.98. She also has $1,352.00 in RRSP. Moreover, she pays $135.30 for house phone, cell phone, and internet and $148.00 for car insurance and gas. In the Board’s view, these are discretionary expenses for someone, who claims is living in extreme poverty.

CONCLUSION

26Based on the reasons stated above, the Board finds that the Applicant did not establish that she had an inability to pay her taxes. In fact, the evidence reveals that the Applicant was able to pay her 2017 property taxes.

27The Board therefore dismisses the Applicant’s application and determines that this application does not qualify for relief under the Act.