Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: April 24, 2019

FILE NO.: WR 153794

Assessed Person(s): Gus Kay, Anastasia Kay

Appellant(s): Gus Kay, Anastasia Kay

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 14

Respondent(s): City of Markham

Property Location(s): 263 Green Lane

Municipality(ies): City of Markham

Roll Number(s): 1936-020-111-49896-0000

Appeal Number(s): 3267795, 3301859 and 3357149 (deemed 2019 appeal)

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

Hearing Event No. 698169

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

Heard: June 4, 2018 in Markham, Ontario

APPEARANCES:

Parties	Representative
Gus Kay	Self-Represented
MPAC	Tong Li
City of Markham	No one appeared

DECISION OF THE BOARD DELIVERED BY Mark Spraggett

REASONS

Background

1Gus Kay (the “Appellant”) is the owner of 263 Green Lane (the “Subject Property”), a single-family detached residential dwelling in the City of Markham.

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. (“current value”).

3For the 2017 and 2018 taxation years under appeal, MPAC has assessed the value of the Subject Property at $1,325,000 and $1,341,000 respectively.

4The Appellant filed an appeal with the Assessment Review Board (the “Board”) for the 2017 taxation year, and he has been deemed to have brought the same appeal with respect to the Subject Property for the 2018 taxation year pursuant to s. 40(26) of the Act. It is the Appellant’s position that MPAC’s assessment of current value is too high and that the correct current value is $1,134,000. At this hearing, MPAC takes the position that its assessed value is correct.

5Pursuant to s. 40(11) of the Act, the City of Markham, 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.

6Section 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 possessed by each ratepayer.

7MPAC takes the position that an equitable reduction is not required. The Appellant did not assert that an equitable reduction is required. Therefore, in this proceeding, this ground for appeal is not in issue.

8At the completion of the hearing, the Board reserved its decision. 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 valuation date, January 1, 2016, is $1,341,000. As no party is seeking an increase in value for the 2017 taxation year, the Board accepts that the current value for the 2018 taxation year is $1,325,000.

Relevant Legislation

9The 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.

Issue

10The issue to be determined in this appeal is:

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

Description of the Subject Property

11The Subject Property is a two-storey residential single-family detached house, built in 1985 and located in the City of Markham. The total building area is 3,502 square feet in addition to a finished basement of 910 square feet.

Discussion, Analysis and Findings

MPAC’s Evidence

12Tong Li, a Property Valuation Analyst represented MPAC and testified at the hearing on behalf of MPAC.

13Ms. Li filed a Valuation Report (“Report”), dated February 28, 2018, at the hearing.

14Ms. Li requested an inspection of the Subject Property but was unsuccessful and unable to visit the property.

15Ms. Li relied on the Direct Comparison Approach in arriving at her opinion of current value for the Subject Property. In lieu of a quantitative approach, Ms. Li applied a relative comparison analysis to establish relationships from market data, without resorting to quantification. In so doing, Ms. Li presented a probable range for current value by bracketing the Subject Property between proposed comparable properties that are inferior and superior to it.

16Ms. Li identified seven proposed comparable properties in the vicinity of the Subject Property, with sales from June 2015 to November 2016, in support of her analysis. The lot sizes of the proposed comparable properties are within range of the Subject Property. They all have the same quality class, were built within a nine year period of the Subject Property and have total building areas that are within range of the Subject Property’s building area.

17Ms. Li adjusted the Subject Property’s value downward by 2% to account for the light traffic in the area. For the same reason, similar adjustments were made, to a number of the proposed comparable properties.

18Ms. Li arrived at a time adjusted sale price range between $1,220,724 to $1,534,788 for the proposed seven comparable properties. Factoring in adjustments for the differences between the Subject Property and the proposed comparable properties, the sale price range becomes $1,291,783 to $1,410,639. Ms. Li calculated the median value to be $1,342,150, which concludes is the current value of the Subject Property.

MPAC’s Submissions

19Relying on its evidence, MPAC submits that the correct current value for the taxation years 2017 and 2018 of $1,325,000 and $1,341,000 are reasonable.

20MPAC disagreed with four of the five proposed comparable properties provided by the Appellant, arguing that they are considerably smaller than the Subject Property.

21MPAC disagreed with the Appellant’s view that the adjustment for light traffic conditions should be 10% instead of 2%.

Appellant’s Evidence

22The Appellant was self-represented and testified at the hearing.

23The Appellant provided Multiple Listing Service® (“MLS®”) information on five proposed comparable properties, one of which is also in MPAC’s evidence.

24The Appellant testified that he relies on his MLS® listings and his traffic adjustment factor of 10% as his evidence in support of his position on current value. The Appellant believes the adjustment factor should be 10% because he states that traffic is heavier than Ms. Li has described.

25The Appellant’s evidence of MLS® properties indicate they all sold in the market place throughout 2015. The sale price range is from $920,000 to $1,250,000.

Appellant’s Submission

26Relying on his evidence, the Appellant submits that the correct current value for taxation years 2017 and 2018 is $1,134,000.

Findings

27The Board has reviewed all the evidence from all the parties in this appeal. Both parties provided their own proposed comparable properties from which they presented their respective positions on current value for the Subject Property. Although in varying degrees of application, both parties resorted to the Direct Comparison Approach to analyze and arrive at their respective positions on current value for the Subject Property.

28Under s. 44.(3)(a) of the Act, the Board must first determine “the current value of the land.” The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the property on the valuation date or close to it. If, as in this case, no such transaction took place, the next best measure of current value is an arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

29To estimate the value for the Subject property, based on a pool of proposed comparable properties from both parties, there must be sufficient elements of comparability. Many of the requisite elements are in terms of physical factors, such as building area, land area, land frontage, age of construction and physical condition. The Board is not persuaded by any scenario that only relies on a single factor alone, to arrive at a valid estimate of value.

30In this instance, the Appellant provided five proposed comparable properties to support his position on current value. The Board finds that only one of the five properties is comparable in some respects to the Subject Property. The remaining properties are too small in building area to be worthy for consideration. Furthermore, the Board notes that the Appellant did not provide sufficient details in describing these properties with the exception of the one comparable property, which is also included in MPAC's list of comparable properties. The Board finds that the MLS® documentation submitted by the Appellant does not provide sufficient property description details. The Board also notes that the authors of these MLS® listings were not present at the hearing to provide these details. Therefore the Board will give little weight to this evidence in arriving at a current value.

31The Appellant submits that a 10% traffic adjustment should be applied to his property for what he considers to be heavier traffic than normal. He references this adjustment rate from what he believes he received from a prior adjustment from MPAC over 10 years ago. It should be noted that the Board granted the Appellant 30 days from the hearing date to submit to all parties, the document that verifies this assertion. However, he did not subsequently provide this document. Consequently, the Board does not accept his submission.

32The Board now turns to its consideration of MPACs seven proposed comparable properties. The Board rejects 21 Bradgate Drive as a suitable comparable property. It was built in 1994 whereas all the remaining properties have year build timelines ranging from one year to two years from the Subject Propertys year built date of 1985.

33The Board finds that the remaining six comparable properties provided by MPAC offer elements of comparison suitable for the Board to make a determination of current value. They all have similarities based on lot size, age and building area.

34The Board finds that the average of the adjusted sale prices for these six comparable properties is more representative of the current value of the Subject Property than the median value which has been used by MPAC. All the selected comparable properties demonstrate a very high degree of comparability, so using the median value is not necessary. Whereas MPACs analysis of using all seven comparable properties and applying the median value, results in an estimate of current value of $1,342,150, the Boards approach results in a value of $1,349,930. As MPAC is not seeking a higher value for either taxation years, the Board finds that it is reasonable to conclude that the correct current values are $1,325,000 for the 2017 taxation year and $1,341,000 for the 2018 taxation year.

DECISION

35The correct current value of the Subject Property is $1,325,000 for the 2017 taxation year and $1,341,000 for the 2018 and 2019 (deemed) taxation years.

2019 DEEMED APPEAL

36An appeal for the 2018 taxation year is presently before the Board. Section 40.(26) of the Act provides that the appellant is deemed to have made the same appeal for the subsequent taxation year if the appeal is not finally disposed of before March 31 of the subsequent taxation year. The Board has not disposed of the 2018 appeal before March 31, 2019. For that reason, this decision also applies to the 2019 taxation year.

37Section 40.(26) of the Act directs:

Deemed appeals, 2009 and subsequent years

(26) For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed.