Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 16, 2019

FILE NO.: WR 154542

Assessed Person(s): R.S

Appellant(s): R.S.

Respondent(s): City of Toronto

Property Location(s): Withheld

Municipality(ies): Toronto

Roll Number(s): Withheld

Application Number(s): 3317059

Taxation Year(s): 2017

Hearing Event No.: 701268

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

Heard: July 16, 2018 in Toronto, Ontario

APPEARANCES:

Parties

Representative/Counsel^+^

R.S.

Self-represented

City of Toronto

Graham Thomson^+^ and Luis Verastegui

DECISION OF THE BOARD DELIVERED BY DAN WEAGANT

INTRODUCTION

1R.S. (the “Applicant”) filed an application to the City of Toronto to have his 2017 property taxes reduced, cancelled or refunded because he was unable to pay due either to sickness or extreme poverty, as provided for under s. 323.(1)(e) of the City of Toronto Act (the “Act”).

2The City of Toronto (the “City”) has passed a by-law, delegating its authority to determine such applications to the Assessment Review Board (the “Board”) under s. 323.(11) of the Act.

ISSUE

3The issue before the Board is whether or not the Applicant’s 2017 property taxes should be cancelled, reduced or refunded because of an inability to pay for the reason of sickness or extreme poverty. This requires the Board to determine a number of things. First the Board must determine, based on the evidence at the hearing, if the Applicant was unable to pay his 2017 property taxes. If the Board determines he was unable to pay the property taxes, the Board must then determine if the reason he was unable to pay was either sickness or extreme poverty.

4If the Board determines that the reason was sickness or extreme poverty, the Board must then decide on the amount of the taxes levied to be cancelled, reduced or refunded.

DECISION

5The Board finds that the Applicant did not demonstrate that he was unable to pay the property taxes levied in 2017. The Application is dismissed.

REASONS FOR THE DECISION

Was the Applicant Able to Pay the Property Taxes Levied in 2017?

6The Applicant testified that he inherited the subject property upon the death of his sister. The mortgage was discharged in 2016.

7The Applicant reported a total annual income for 2017 of $8,192. After deductions for income tax, pension, and employment insurance, the Applicant’s net income in 2017 was $7,118. The average net household income per month was $593.

8The Applicant reported that monthly financial activity for the household was transacted through a single checking account. The balance on that account on May 31, 2017 was $605.19. The balance on December 31, 2017 was $1,351.53.

9The subject property has a 2016 current value assessment of $525,000. The Applicant testified that he has three separate RRSP accounts. These accounts have a total value of $175,517 as of December 2017 according to statements submitted in the Applicant’s disclosure.

10Monthly expenses reported by the Applicant for 2017 totaled approximately $672 per month. This figure was determined from his testimony and the checking account activity in evidence. The Applicant’s documents show records only for the months of June through December 2017. These expenses are summarized as follows (all rounded to the nearest dollar and averaged):

• Groceries & household supplies and clothing - $218

• Electric and utility- $35

• Condominium fees - $330

• Transportation - $25

• Education course registration - $16

• Property taxes - $48

The City’s Submissions

11The City submitted that the evidence before the Board strongly suggested that the Applicant was able to pay his property taxes in 2017. It acknowledged that the Applicant carried out a frugal lifestyle, geared to his monthly income and his monthly income was approximately $80 less that his living expenses. However, the value of holdings in his RRSP accounts more than covered his accumulated debt and that, rather than being unable to pay his 2017 property taxes, the Applicant was simply not taking the necessary steps to address them.

12The City submitted that the subject property’s current value assessment is lower than the actual market value as of 2017. By comparison to other properties that sold in the time frame of the application, the City submits that value is estimated at $671,000 and that there is no mortgage registered.

13The City submitted that when the subject property’s value and the RRSP accounts are taken together, the Applicant’s assets total $846,517. It submits that the 2017 property taxes levied could have been paid by applying some of these assets.

14City records indicated that the current property tax account stands at approximately $15,822; $8,057.81 of which is accrued property tax arrears and interest for previous years, including the amount levied for 2017 of $2,942.67. The City acknowledged that payments had been made in 2017, but that those payments had been applied to arrears from previous years.

15The remainder of the property tax account ($7,764.19) is made up of other municipal surcharges and water services from previous years, including approximately $1,800 that had been sent to the Bailiff for collection.

The Board’s Analysis

16It is clear that the Applicant leads a modest lifestyle, geared to his monthly income. The checking account data indicates he matches his spending to the amount of money coming to him from month to month.

17However, monthly finances are not the only measure used by the Board to determine if an Applicant was able to pay property taxes. The Board regularly reviews overall financial conditions, including credit card debt and other loans or commitments, along with accumulated financial assets.

18The Applicant has a significant amount of money in RRSP investment accounts. While these accounts would be subject to withholding tax upon withdrawal, his low income serves to mitigate the tax implication should he choose to use those funds to get his finances back under control.

19The Board heard about the Applicant’s mental health issues in testimony and those issues were sufficiently explained and confirmed in the documents disclosed. The Applicant testified that he had help with day to day living challenges; his finances are one area where he can use the help. However, the Act makes no provision for mismanagement or confusion over personal finances as a reason for not paying property taxes.

20The Applicant’s accumulated debt (including credit facilities for which only statements from 2009, 2010 and 2013 were made available) is approximately $71,377. This amount includes the taxes levied for the 2017 taxation year. The Board has no jurisdiction or authority to make findings beyond the ability to pay taxes for the year under appeal. The Board recognizes the challenge the Applicant faces in managing his finances, but that is not the same as being unable to pay, which is the specific wording in the statute.

21The Board finds that the Applicant has the resources at hand to pay his taxes, as his assets are of greater value than his liabilities. Accordingly, he has failed to demonstrate that he was unable to pay the property taxes in 2017.

22The application is therefore dismissed.