Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 30, 2019

FILE NO.: WR 157192

Assessed Person(s): Orazio Alfonsino, Lucy Alfonsino

Appellant(s): Orazio Alfonsino, Lucy Alfonsino

Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 09

Respondent(s): City of Toronto

Property Location(s): 43 Reidmount Avenue

Municipality(ies): City of Toronto

Roll Number(s): 1901-111-220-00900-0000

Appeal Number(s): 3259679 and 3296715 (deemed 2018 appeal)

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

Hearing Event No.: 688469

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

Heard: January 17, 2018 in Toronto, Ontario

APPEARANCES:

Parties	Representative
Orazio Alfonsino and Lucy Alfonsino	Self-represented
MPAC	Mary Stiliadis
City of Toronto	No one appeared

DECISION OF THE BOARD DELIVERED BY CAROLINE KING AND PAUL MULDOON

INTRODUCTION

1Mr. Orazio Alfonsino and Mrs. Lucy Alfonsino, (the “Appellants”), own 43 Reidmount Avenue, Toronto, Ontario (the “Subject Property”). They appealed their 2017 Subject Property tax assessment arguing that the MPAC $852,000 assessed value of their Subject Property was too high and that the current value of their Subject Property for the 2017 taxation year should be $558,000 due to nuisance factors related to location as the Subject Property abuts the Agincourt GO railway station.

2MPAC’s valuation report estimated the current value of the Subject Property at $986,000, but at the hearing recommended that the Assessment Review Board (the “Board”) find the current value not at the $986,000 value as in the valuation report; not at the $852,000 assessed value; but rather at a lower current value of $805,000.

3The Board must decide two things in this appeal. First, the Board must determine, based on the evidence at the hearing and post-hearing submissions, the current value of the Subject Property for the 2017 taxation year.

4Second, having reference to the assessments of similar properties in the vicinity, the Board must also decide if the current value determined needs to be reduced for the purpose of equitable assessment.

5In addition to the 2017 taxation year appeal filed by the Appellants, there is a 2018 taxation year appeal before the Board. This is because, pursuant to subsection 44.(26), a 2018 appeal is deemed to have been filed if the 2017 taxation year appeal was “not finally disposed of before March 31,” 2018. The Board did not dispose of the 2017 appeal before March 31, 2018. For that reason, this decision also applies to the 2018 taxation year.

DECISION

6For the reasons that follow, the Board finds that there is sufficient evidence to determine the Subject Property’s current value.

7The Board finds that for the 2017 and 2018 taxation years the Subject Property has a current value of approximately $926,000.

8The Board also finds that there is evidence to support a reduction of this value to achieve equitable assessment. Accordingly, the current value is reduced from $926,000 to $838,000 for the 2017 and 2018 taxation years to make the Subject Property’s assessment equitable with the assessments of similar properties in the vicinity.

9The assessment of the Subject Property at 43 Reidmount Avenue is reduced for the 2017 and 2018 taxation years from the initial assessed value of $852,000 to $838,000.

PROCEDURAL HISTORY

10Post hearing submissions were requested regarding the correct current value of the Subject Property as initially the basis for MPAC’s $805,000 current value was not clear and because MPAC has the burden of proving the correctness of the current value of the Subject Property.

11The purpose of the post-hearing submissions was so that the parties could provide further evidence and submissions on the correct current value of the Subject Property and submissions on recent case law regarding MPAC’s burden of proof. The parties completed these submissions by October 2, 2018.

LEGISLATION

12In making its determination of these appeals, the Board must consider the relevant sections of the Assessment Act R.S.O. 1990, c. A.31 (the “Act”). Section 1 of the Act states:

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.

13Section 19.(1) of the Act states:

19.(1) Assessment based on current value. – The assessment of land shall be based on its current value.

14Section 40.(1) of the Act states:

40.(1) Appeal to Assessment Review Board. Any person, including a municipality, a school board or, in the case of land in non-municipal territory, the Minister, may appeal in writing to the Assessment Review Board,

(a) on the basis that,

(i) the current value of the person’s land or another person’s land is incorrect,

(ii) he person or another person was wrongly placed on or omitted from the assessment roll,

(iii) the person or another person was wrongly placed on or omitted from the roll in respect of school support,

(iv) the classification of the person’s land or another person’s land is incorrect, or

(v) or land, portions of which are in different classes of real Subject Property, the determination of the share of the value of the land that is attributable to each class is incorrect; or

(b) on such other basis as the Minister may prescribe.

15Section 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.

What is the Current Value of the Subject Property?

MPAC’s Evidence

16Mary Stiliadis (“MPAC’s Assessor”) gave evidence at the hearing. She provided a valuation report regarding the current value of the Subject Property on the valuation date of January 1, 2016. The Assessor undertook the direct comparison approach to value, which is the most common approach for single-family dwellings, such as the Subject Property. Using the direct comparison approach, MPAC compared the sales values of properties which MPAC determined were comparable to the Subject Property.

17The valuation report compared the Subject Property to five other properties to show how MPAC concluded that the current value of the Subject Property was $986,000. The properties were primarily located on the same side of the same street as the Subject Property. The proximity of the properties that MPAC compared to the Subject Property range from 0.0473 km to 0.3507 km. The Subject Property was built in 1951, all of the other properties were built in either 1955 or 1956. The effective year built of the Subject Property, and all the other properties, except for one, is 1976. The effective year built of Property #3 (47 Reidmount Avenue) is 2004. The chart below sets out key details of both the Subject Property and MPAC’s selected comparable properties. The building total area, finished basement area, and secondary size structures are all measured in square feet.

Table A

Property	43 Reidmount	Property 1 (80 Reidmount)	Property 2 (63 Reidmount)	Property 3 (47 Reidmount)	Property 4 (61 Reidmount)	Property 5 (96 Reidmount)	Property 6 (71 Reidmount)
Effective site area (acres)	0.4	0.34	0.35	0.45	0.35	0.24	0.46
Building Total area	1,323	1,159	1,152	1,132	1,147	1,087	1,673
Finished basement area	None – not finished	862	250	267	231	869	1,538
Secondary Structure 1 Description and size	Shed, 240	n/a	Attached garage, 240 square feet	Attached garage 480 square feet	Attached garage 240 square feet	Attached garage 240 square feet	Attached garage 240 square f
Secondary Structure 2 Description and size	Greenhouse, 192	n/a	n/a	Outdoor pool, 640	n/a	n/a	n/a
Variable 1 Abuts	Abuts railway	n/a	Abuts Railway	Abuts Railway	Abuts Railway	n/a	n/a
Variable 2	No sidewalk on street	No sidewalk on street	No sidewalk on street	Corner lot, No side walk on street	n/a	n/a	n/a
Sale Price/Sale date		$910,000 7/17/2015	$660,000 12/17/2014	$825,000 3/14/2014	$961,000 1/26/2017	$737,000 12/03/2014	$915,000 11/09/2015
TAS Price		$964,597	$757,435	$1,059,400	$851,468	$845,802	$929,345

18At the hearing, MPAC’s Assessor stated that the Subject Property’s $852,000 assessed value was determined using a computer-assisted direct comparison approach to value. The valuation report submitted at the hearing determined that the current value was $986,000 based on the five comparable properties in the area that sold close to the valuation date of January 1, 2016.

19At the hearing she stated that, based on the Appellants’ concerns with issues related to their Subject Property abutting the railway, MPAC revised its analysis to only include the three properties which abutted the railway. MPAC’s Assessor stated that it considered Property #2 ($757,435 time adjusted sale amount) and Property #4 ($851,468 time adjusted sale amount) to be inferior to the Subject Property and Property #3 ($1,059,400 time adjusted sale amount) to be similar. MPAC submitted that based on these three properties, the current value was $889,434 which is the average of the time adjusted sale amount for these three properties.

Appellants’ Evidence

20The Appellants both gave evidence. The Appellants’ evidence was that the assessed value of their Subject Property had increased from $461,000 value on January 1, 2012 to $852,000 value on January 1, 2016; that their income had not increased at the same rate; and that the value of their Subject Property was negatively impacted by the fact that their Subject Property abuts a railway and the related noise, health, and safety issues they describe are related to the railway. The Appellants did not provide any means as to how to quantify in monetary terms the abutting railway’s impact on the value of their property.

21The Appellants proposed eight properties which they submitted were similar to their Subject Property. All but two of these properties had no valid sales since January 1, 2012. The two properties which did have more recent sales include 47 Reidmount Avenue(also proposed by MPAC and is listed as Property #3 in Table A above), and a property at 96 Reidmount Avenue which has an effective site area of 10,472 square feet (compared to an effective site area of the Subject Property of 17,479 square feet).

ANALYSIS

22The Board is required to determine the correct current value of the Appellants’ Subject Property on the valuation date of January 1, 2016.

23The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation day or close to it. In this case, no such transaction took place and so the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the valuation date of January 1, 2016.

24The Board considered the evidence and submissions made by both parties. The Appellants raised a concern about the increase in valuation between the 2012 and 2016 taxation cycles. However, the current value of the Subject Property for the 2017 and 2018 taxation years is focused on the January 1, 2016 valuation date, not the January 1, 2012 valuation date. The law directs the Board’s determination of current value to be based on the value of the property on the January 1, 2016 valuation day and not in relation to any increase or decrease in value from previous valuation days. In this case, this means that the properties proposed by the Appellants which do not have sale dates after 2012 have been excluded because of the lack of recent sale data.

25A key concern of the Appellants was related to the impact of the abutting railway but they did not provide any way to quantify in monetary terms any such impact on their Subject Property. In this case, the Board finds that the best way to address this concern is to review the evidence about the three properties located nearby which also abut the railway. The Board did not find the property located at 96 Reidmount Avenue to be comparable because it does not abut the railway and because it is not comparable in size (the Subject Property is approximately 60% larger than 96 Reidmount Avenue).

26The Board finds that MPAC Property #3 is superior to the Subject Property and not a good comparable property as it has an effective year built of 2004, which is 28 years more recent than the Subject Property’s 1976 effective year built, and because Property #3 has an outdoor pool. This means that the Board will not use Property #3 in determining the Subject Property’s current value like MPAC did. However, the Board finds a calculation of MPAC’s analysis based on the average time adjusted sales price of MPAC Property #2 and MPAC Property #4 is an appropriate analytical approach.

27MPAC Property #2 and MPAC Property #4 are comparable to the Subject Property, in age and quality of construction. Unlike the Subject Property, Properties #2 and #4 both have attached 240 square foot garages and small areas of their basements which are finished, however, the Subject Property has a 240 square foot shed in addition to a 192 square foot greenhouse built approximately in 2004.

28The Appellants’ lot is wider, has a larger lot size (or effective site area) and a larger building total area than both MPAC Properties #2 and #4. Collectively, these features indicate that the Subject Property should have a higher current value than the value for MPAC Properties #2 and #4. To calculate the Subject Property current value therefore, and to ensure that it reflects the larger building/lot size etc., the Board has determined that the larger square footage of the Subject Property should be multiplied by the average time adjusted sale amount price per square foot for MPAC Properties #2 and #4.

29The time adjusted sale amount per square foot for MPAC Property #2 is $657.50 ($757,435 time adjusted sale amount/1,152 square foot = $657.50).

30The time adjusted sale amount per square foot for MPAC Property #4 is $742.34 ($851,468 time adjusted sale amount/1,147 square feet = $742.34).

31The average time adjusted sale amount per square foot of Properties #2 and 4 is $699.92 (($657.50 + $742.34)/2 = $699.92).

32When the $699.92 average time adjusted sale amount of Properties #2 and 4 is applied to the 1,323 square foot size of the Appellants’ building, the result is $925,994.16 (rounded to $926,000) ($699.92 x 1,323 = $925,994.16). The Board finds that the current value of the Subject Property is $926,000 (rounded).

Is a reduction in the Current Value necessary to achieve Equitable Assessment when reference is made to Assessments of Similar Properties in the Vicinity?

MPAC’s Evidence

33MPAC introduced its Equity Analysis Report which identified sales of 30 single- family detached homes (not on water) from March 1, 2014 to January 31, 2017 that were located within 1.55 km of the Subject Property. The level of assessment was 0.905.

34At the hearing, MPAC’s Assessor, submitted that the Subject Property’s current value should be reduced by applying the 0.905 level of assessment to ensure that the Subject Property was assessed at levels consistent with other similar real property in the vicinity.

Appellants’ Evidence

35The Appellants did not present any evidence regarding whether an equitable adjustment was required, but argued that when looking at the assessed values of other properties in their vicinity, their assessment was too high.

Analysis

36The Board is to consider the assessments of similar properties in the vicinity to determine if the current value found by the Board is inequitable relative to the assessments of the similar properties in the area.

37Unlike the process in establishing current value, properties do not need to be comparable for the purpose of establishing equity. However, properties do need to be similar (considering all points of comparison) and within a reasonable proximity to the Subject Property. An assessment to sale ratio in the sample property sales determine the level of appraisal is an accepted way to determine equity in property tax.

38In this case, the Board has before it the evidence of MPAC’s Equity Analysis Report, supports the uncontested evidence of MPAC and finding regarding the 0.905 level of appraisal. As stated by MPAC’s Assessor, this level of appraisal suggests that the assessed values of similar sales properties in the vicinity are approximately 10% lower than the actual sales values.

39The Board is satisfied that applying the level of assessment to the current value is a reasonable approach to determine equity in this case.

40Therefore the Subject Property’s $926,000 current value as found by the Board multiplied by 0.905 equals $838,030 (rounded to $838,000). In other words, the Board finds that the evidence indicates that a fair and equitable assessment of the Subject Property is at 0.905 of the $926,000 current value which is $838,000 (rounded).