Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 21, 2019

FILE NO.: WR 157699

Assessed Person(s): Reginald Ian White, Lynne Suzanne White

Appellant(s): Reginald Ian White, Lynne Suzanne White

Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region 06

Respondent(s): Municipality of Trent Hills

Property Location(s): 50 Front Street East

Municipality(ies): Municipality of Trent Hills

Roll Number(s): 1435-332-010-06000-0000

Appeal Number(s): 3270170 and 3292823

Taxation Year(s): 2017 and 2018

Hearing Event No.: 704865

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

Heard: October 24, 2018 in Campbellford, Ontario

APPEARANCES:

Parties

Representative

Reginald Ian White, Lynne Suzanne White

Self-represented

MPAC

Jennifer Rutledge

Municipality of Trent Hills

No one appeared

MEMORANDUM OF ORAL DECISION DELIVERED BY JENNIFER GRIFFITH ON OCTOBER 24, 2018

Background

1Reginald Ian White and Lynne Suzanne White (the "Appellants") are the owners of 50 Front Street East (the "Subject Property"), which is located in the Municipality of Trent Hills.

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").

3MPAC has assessed the current value of the Subject Property at $469,000 for the 2017 taxation year and at $407,000 for the 2018 taxation year.

4The Appellants have filed appeals for the taxation years 2017 and 2018 with the Assessment Review Board (the "Board"), pursuant to s. 40 of the Act. It is their position that MPAC’s assessment of current value is too high, but they accept the current value of $317,000 proposed by MPAC. The Appellants only issue relates to the classification of the Subject Property, which they believe should be commercial as opposed to residential. At this hearing, the parties agree that the assessed value should be $317,000 for the 2017 and 2018 taxation years. MPAC argues that the current use is residential.

5Pursuant to s. 40(11) of the Act, the Municipality of Trent Hills is a party to this proceeding. However, no one appeared at the hearing on behalf of the Municipality.

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 Appellants testify that they have no issue in regard to equity. Therefore, equity is not at issue at this hearing.

7Upon completion of the hearing, the Board rendered an oral decision. A request for written reasons was later sent to the Board. The purpose of this decision is to provide these reasons.

8The Board finds the current use of the Subject Property is residential.

9The Board finds the current value is $317,000 for the 2017 and 2018 taxation years. Therefore, the Board reduces the returned assessment from $469,000 to $317,000 for the 2017 taxation year and reduces the returned assessment from $407,000 to $317,000 for the 2018 taxation year for the Subject Property. Pursuant to s. 44(3)(b) of the Act, an equitable reduction of this value is not required.

10The apportionment breakdown has changed to the following for the 2017 and 2018 taxation years:

Apportionment breakdown for 2017 Taxation Year

FROM TO

Residential $378,700 $317,000

Exempt $90,300 $0

TOTAL $469,000 $317,000

Apportionment breakdown for 2018 Taxation Year

FROM TO

Residential $331,500 $317,000

Exempt $75,500 $0

TOTAL $407,000 $317,000

RELEVANT LEGISLATION

11The relevant sections of the Act are as follows:

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:…

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

19.3 Classification day – The day as of which land shall be classified for taxation year is June 30 of the previous year.

Burden of proof

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.

3(1)28 All real property in Ontario is liable to assessment and taxation, subject to the following exemptions from taxation:…

28. A hydro-electric generating station, as defined in subsection 92.1 (24) of the Electricity Act, 1998 and land, buildings and structures used in connection with the generating station, as may be prescribed by the Minister, but not any portion of the land, buildings or structures used for any other purpose. This paragraph applies to the 2001 and subsequent taxation years.

ISSUE

The only issue to be determined on these appeals is the proper classification of the property for the 2017 and 2018 taxation years.

Description of the Subject Property

12The Subject Property is a residential dwelling located in the village of Hastings in the Municipality of Trent Hills. The Subject Property is a two and one-half storeys building, with a total building area is 6,410 square feet ("sq. ft."), on a lot size of 3.19 acres, with an effective year built in 1871 and a quality of construction rating of 6. The original structure was a hydraulic plant powering electrical generation and water pumps; and was zoned industrial. In 1987 when the Subject Property was purchased by the Appellant it was zoned industrial, which allowed for a (24 X 18) night/watch apartment and a maintenance workshop. However, residential use was not permitted due to noise, vibration, and danger moving equipment. In the spring of 2008, the zoning was changed to residential.

Discussion, Analysis and Findings

The correct current value of the Subject Property for the taxation years 2017 and 2018

Preliminary Issues

13At the start of the hearing, the Appellants testify that they have had discussions with MPAC including the Mandatory Meeting and are in agreement with the proposed current value of $317,000 for the 2017 and 2018 taxation years. The Appellants also testify that they have no issues in regard to equity. The Appellants submit that the only issue is the classification of the Subject Property which they believe should be commercial property tax class.

14On the other hand, MPAC is of the view based on an inspection on May 24, 2017 and again on May 8, 2018, that the current uses of the Subject Property as of the valuation date of January 1, 2016 is residential. Therefore, the correct property class is residential. MPAC also confirms that the current value of $317,000 is based on sales of suggested comparable properties which occurred in the open market over the period 2015 to 2017.

15Based on the above preliminary issues, the Board accepts the current value $317,000 as agreed to by the parties for the 2017 and 2018 taxation years. The remaining issue to be determined is the current use of the Subject Property.

MPAC’s Evidence

16Jennifer Rutledge represents MPAC. She testifies that the property was inspected on May 24, 2017 and again on May 8, 2018 for a more detailed inspection of the Subject Property. Ms. Rutledge states that she arranged to have both the Mandatory Meeting and the 2018 inspection with the owners on that same day at the Subject Property.

17Ms. Rutledge states that she also reviewed the classification of the Subject Property, because she was advised by the Appellants that there is no existing contract for generating hydro. Ms. Rutledge states that during the periods when the Subject Property was operating as a hydro-generating station, it received an exemption apportionment of the assessed value as per s. 3(1)28 of the Act. However, as of the valuation date of January 1, 2016 for the appeals at hand, the Subject Property was no longer a hydro-operating station and the exemption was removed. Ms. Rutledge states that as part of her review the classification was changed from commercial use to residential which is the current use of the Subject Property.

MPAC’s Submissions

18MPAC argues that the Subject Property is no longer used as a hydro generating station, and is no longer subject to an exempt apportionment. MPAC argues that the current use of the Subject Property is residential.

Appellants’ Evidence

19The Appellants provide a detailed history of the Subject Property dating back to 1850. The Appellants testify that they purchased the Subject Property in 1987 and provide an account of the issues and challenges they encountered regarding zoning and classification, which led to appeals to the Ontario Municipal Board ("OMB") and to the Ontario Superior Court over the period 1987 to 2013.

20The Appellants testify that they have been unsuccessful so far and are hoping that the Board would be able to resolve the issues of classification. In an attempt to demonstrate their frustration over the years, the Appellants cited a number of the issues which led them to this Board:

I. Vandalism in 1987 (theft, arson, equipment moved to shed);

II. Condo developer purchased adjacent land in 1989 and claimed that the Appellants have no rights to hold water in the pond which enabled the mill to operate. The Appellants appealed to the OMB and Municipality withdrew support for the hydro project that the Appellants were involved with;

III. A Certificate of Structural Adequacy from a professional engineer was requested by the Building Inspector for the mill. Unfortunately the Appellants were unable to obtain it and were later ordered off the Subject Property for non-compliance with zoning;

IV. Generating license was granted to the Appellants in 2003;

V. In 2008 the Municipality directed MPAC to reclassify the Subject Property from industrial to residential and this action was appealed by the Appellants;

VI. In 2008 the Municipality launched a lawsuit against the Subject Property’s title with the Superior Court which went on for 4 years; and

VII. The Appellants responded to the Municipality lawsuit with a counter suit in an attempt to preserve the hydro contract (which was eventually lost).

21The Appellants testify that the Subject Property is currently used as residential, and that equipment and other items stored at the Subject Property are their personal belongings. The Appellants testify that any electricity generated at the Subject Property is for their personal use. The Appellants present no other official documents (permits and/or contracts) to demonstrate any other use of the Subject Property than that of residential use.

Appellants’ Submissions

22The Appellants submit that the Subject Property should be classified as commercial, although the Appellants present no factual evidence in support of a commercial classification.

Findings on Current Value

23Under 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 a property on the valuation date or close to it.

24In regard to current value, the Board accepts the parties consent to a current value of $317,000 as stated above.

25In regard to the issue of classification, the Board finds the current use of the Subject Property is residential, because both parties confirmed the current use as residential, as of the classification date of June 30, 2016 for the 2017 taxation year; and June 30, 2017 for the 2018 taxation year, which is in compliance with s. 19.3 as stated above.

26With the finding of the current use as residential, s. 3(1)28 no longer applies, because the Subject Property is no longer operating as a hydro-generating station.

27The Board finds that the historical information presented by the Appellants about the Subject Property is not relevant to the appeals at hand. The reason is that each valuation period is based on a specific classification and valuation dates and the current use at that time, as stipulated by the Act. For the appeals at hand, the valuation date is January 1, 2016, which is far removed from the historical issues and challenges which occurred over the period (1987 to 2013); and the current use changed from hydro-generating station to residential use. It is also far removed from the June 30, 2016 and June 30, 2017 classification dates.

28The Board also finds that the Appellants present no official documents (permit and/or contract) that authorize them to operate a hydro-generating station at the Subject Property. Instead, the Appellants confirm that they no longer have a contract to generate hydro for commercial use. In fact, the Appellants confirm that the current use of the Subject Property is residential as of the classification days of June 30, 2016 and June 30, 2017.

29Based on the above evidence, the Board finds:

a) That the proper classification of the Subject Property is in the residential property class; and

b) That the current value of the Subject Property is $317,000 for the 2017 and 2018 taxation years.

DECISION

30The Board finds that the current value is $317,000. Therefore, the Board reduces the returned assessment from $469,000 to $317,000 for the 2017 taxation year and reduces the returned assessment from $407,000 to $317,000 for the 2018 taxation year for the Subject Property.

31The apportionment breakdown has changed to the following for the 2017 and 2018 Taxation Years:

Apportionment breakdown for 2017 Taxation Year

FROM TO

Residential $378,700 $317,000

Exempt $90,300 $0

TOTAL $469,000 $317,000

Apportionment breakdown for 2018 Taxation Year

FROM TO

Residential $331,500 $317,000

Exempt $75,500 $0

TOTAL $407,000 $317,000