Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
June 03, 2019
WR 160195
Assessed Person(s):
Laurentian Heights Limited
Appellant(s):
Laurentian Heights Limited; John Wallace
Respondent(s):
Municipal Property Assessment Corporation (“MPAC”), Region 28
Respondent(s):
City of North Bay
Property Location(s):
Kenreta Drive
Municipality(ies):
City of North Bay
Roll Number(s):
4844-050-078-05606-0000
Appeal Number(s):
3259780, 3314270 and 3367598
Taxation Year(s):
2017, 2018 and 2019
Hearing Event No.
712771
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard:
April 26, 2019 in North Bay, Ontario
APPEARANCES:
Parties
Representative
Laurentian Heights Limited
John Wallace
MPAC
Louise St. Jean
City of North Bay
No one appeared
DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH
BACKGROUND
1Laurentian Heights Limited (“LHL”) represented by John Wallace (“Appellant”) is the owner of Kenreta Drive (the “Subject Property”), which is located in the City of North Bay (the “City”).
2Pursuant to the provisions of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), the assessment of the 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.
3MPAC has assessed the current value of the Subject Property at $83,000 for the 2017 and 2018 taxation years; and at $80,000 for the 2019 taxation year.
4The Appellant has filed appeals for the 2017, 2018, and 2019 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 40 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 should be $70,000. At this hearing, MPAC takes the position that its assessed values should be reduced to $80,000 for the 2017 and 2018 taxation years; and confirmed at $80,000 for the 2019 taxation year.
5Pursuant to s. 40(11) of the Act, the City, is a party to this proceeding. However, no on appeared on behalf of the City.
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. MPAC takes the position that an equitable reduction is not required. The Appellant asserts no position on equity. Therefore, equity is not at issue at this hearing.
7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds the current value assessment for the 2017, 2018 and 2019 taxation years is $71,000. Therefore, the Board reduces the returned assessment from $83,000 to $71,000 for the 2017 and 2018 taxation years; and from $80,000 to $71,000 for the 2019 taxation year. Pursuant to s. 44.(3)(b) of the Act, an equitable reduction of this value is not required.
RELEVANT LEGISLATION
- “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 19.2(1) of the Act states:
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:
- For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.
11Section 40.(17) of the Act states:
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.
12Section 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.
ISSUES
13The issue to be determined on this appeal is the correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years.
Description of the Subject Property
14The Subject Property is vacant residential land not on water (property type 100), located at Kenreta Drive, in the City of North Bay. The Subject Property has an effective frontage of 78.71 feet, an effective depth of 124.02 feet and an effective total lot size of 0.23 acre.
DISCUSSION, ANALYSIS AND FINDINGS
The correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years
MPAC’s Evidence
15Louise St. Jean, Valuation Specialist for MPAC presents a Valuation Report, dated August 22, 2018 (“Valuation Report”) which she prepared and testifies to the information contained in the report.
16Ms. St. Jean states that she visited the Subject Property on January 3, 2018, and confirmed that the measurements, data and classification are correct. She states that she also reviewed the sales and property data of the suggested comparable used in her analysis on January 3, 2018.
17In support of current value, Ms. St. Jean states that she relies on the Direct Comparison Approach to value and presents an analysis of the sales of seven suggested comparable properties which occurred over the period 2013 to 2018. These seven suggested comparable properties are located in the same homogeneous neighbourhood, and within 0.63 kilometres of the Subject Property. Ms. St. Jean states that she relies on the actual sale prices, because it was very difficult to determine an accurate time adjustment factor due to the limited number of sales of vacant lot.
18Ms. St. Jean states that she selected sold properties that are inferior, superior and similar to the Subject Property to allow her to establish a probable range of current value for the Subject Property, by bracketing the Subject Property between sold properties that are inferior and superior to it.
19These seven suggested comparable properties are located at 440 Surrey Drive, sold in 2013 for $82,500; 21 Kenreta Drive, sold in 2016 for $95,000; 436 Surrey Drive, sold in 2014 for $75,000; 438 Surrey Drive, sold in 2016 for $80,000; Surrey Drive (Roll ending 46400), sold in 2013 for $70,000; 19 Kenreta Drive, sold in 2016 for $82,500; and Surrey Drive (Roll ending 47800), sold in 2018 for $70,000.
20In reviewing these seven sales, Ms. St. Jean testifies that these suggested comparable properties are similar in size to the Subject Property and demonstrate a median sale price of $80,000. Based on this analysis, Ms. St. Jean estimates the current value to be $80,000.
MPAC’s Submission
21Relying on its evidence, MPAC submits that the current value should be $80,000.
22MPAC argues that no adjustments should be given to the issue of bedrock, because MPAC only evaluates the raw data (frontage, depth and total site area) of vacant lots. MPAC argues that such costs are the responsibilities of developers like LHL, which the Appellant concurs to on cross-examination.
Appellant’s Evidence
23The Appellant submits that the returned assessment of $83,000 is too high and that the correct value should be around $50,000, which is the expected price if an offer to purchase is made.
24The Appellant testifies that the Subject Property is negatively impacted by solid bedrock and very bad view. He is of the opinion that an adjustment is warranted to address these issues. The Appellant testifies that lots with similar bedrocks were blasted at a cost in the range of $10,000 to $15,000.
25The Appellant states that the Subject Property was listed on the market for $90,000 and subsequently reduced to $70,000 due to a lack of interested buyers. The Appellant testifies that tax liabilities for the Subject Property are approximately $11,561.94 (over 11 years) and that he will gladly accept an offer of $50,000 for the Subject Property. He confirmed that the current listed price for the Subject Property still remains at $70,000.
26In support of his argument, the Appellant presents his evidence package which he prepared and date June 27, 2018 and testifies to the information contained therein.
27Included in the package is a copy of a portion of the Approved Draft Plan of Subdivision showing the three phases of development along Surrey Drive; a portion of Plan 36R-12526 identifying the Subject Property; and a spreadsheet showing sixteen sales which occurred over the period 2007 to 2018, on the north side lots for both Surrey Drive and Kenreta Drive, with their corresponding lot dimensions for all three phases.
28The spreadsheet shows that eleven sales occurred over the period 2007 to 2013, with sale price ranging from $62,500 to $82,500; one sale in 2015 for $95,000; three sales in 2016, with sale price ranging from $80,000 to $95,000; and one sale in 2018 for $70,000. Based on these sales, the Appellant is of the opinion that the best comparable properties are the sales which occurred at Kenreta Drive, Phase 1 (Lot 6), sold in 2011 for $70,000 and Surrey Drive, Lot 9 (Roll ending 47800), sold in 2018 for $70,000.
29In regard to the negative impact of the bedrock and the lack of good view, the Appellant believes that the Subject Property is seen as less attractive to potential buyers, because the other lots in the same phase of the development were all sold. The Appellant states that 438 Surrey Drive, 440 Surrey Drive, and Surrey Drive (Roll ending 47600) had similar bedrock that was blasted out at a cost in the range of $10,000 to $15,000. The Appellant is of the view that it is not economical to have the bedrock on the Subject Property blasted, because the bedrock at Surrey Drive (Roll ending 47600) was blasted and still remains unsold.
30On cross-examination, the Appellant agrees that costs for such things as (sewer, paving, hydro, engineering fees, preparation, blasting bedrocks) are the responsibilities of Developers like LHL.
Appellant’s Submission
31The Appellant submits that the correct current value for the Subject Property is $50,000 based on the hope of an offer or $70,000 based on sales evidence.
32The Appellant submits that a negative adjustment for the bedrock and lack of a good view is warranted for the Subject Property.
Findings on Current Value
33Under 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.
34In reviewing MPAC’s seven sales in support of current value, the Board did not rely on the four sales at 440 Surrey Drive, sold in 2013 for $82,500; 436 Surrey Drive, sold in 2014 for $75,000; Surrey Drive (Roll ending 46400), sold in 2013 for $70,000; and Surrey Drive (Roll ending 47800), sold in 2018 for $70,000. The Board finds that the sale dates are too far removed from the valuation date of January 1, 2016, to provide any meaningful test of current value. Therefore, the Board relies on the remaining three sales which occurred in 2016 in the same neighbourhood as the Subject Property.
35The remaining three sales at 21 Kenreta Drive, sold in 2016 for $95,000; 438 Surrey Drive, sold in 2016 for $80,000; and 19 Kenreta Drive, sold in 2016 for $82,500 demonstrate an average sale price of $86,000.
36In regard to the issues of bedrock and lack of a good view, the Board finds that the cost to cure value of $15,000 is appropriate because lots with similar bedrock that was blasted sold in the open-market. When this cost to cure is applied to the market value it results in a value of $71,000 ($86,000 - $15,000).
37In regard to the two sales presented in support of current value by the Appellant at Kenreta Drive, Phase 1 (Lot 6), sold in 2011 for $70,000 and Surrey Drive, Lot 9 (Roll ending 47800), sold in 2018 for $70,000, the Board did not rely on these two sales because the sale dates are too far removed from the valuation date of January 1, 2016, to provide any meaningful test of current value.
38Based on all of the above evidence, the Board finds the current value of the Subject Property is $71,000.
DECISION
39The Board finds the current value of the Subject Property is $71,000 for the 2017, 2018 and 2019 taxation years. Therefore, the Board reduces the returned assessment from $83,000 to $71,000 for the 2017 and 2018 taxation years; and from $80,000 to $71,000 for the 2019 taxation year.
“Jennifer Griffith”
JENNIFER GRIFFITH
MEMBER
Assessment Review Board
A constituent tribunal of Tribunals Ontario - Environment and Land Division
Website: www.elto.gov.on.ca Telephone: 416-212-6349 Toll Free: 1-866-448-2248```