Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: September 11, 2019

FILE NO.: WR 155894

Assessed Person(s): Barbara Langley Appellant(s): Barbara Langley Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 3, City of Ottawa Property Location(s): 21A Hampton Avenue Municipality(ies): City of Ottawa Roll Number(s): 0614-073-901-22700-0000 Appeal Number(s): 3267657, 3291234 and 3347109 Taxation Year(s): 2017, 2018 and 2019 Hearing Event No.: 703570 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Assessed Person(s): Robert Hollingshead and Ann Hollingshead Appellant(s): Robert Hollingshead and Ann Hollingshead Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 3, City of Ottawa Property Location(s): 21B Hampton Avenue Municipality(ies): City of Ottawa Roll Number(s): 0614-073-901-22704-0000 Appeal Number(s): 3262484, 3291233 and 3345563 Taxation Year(s): 2017, 2018 and 2019 Hearing Event No.: 703569 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31, as amended

Heard: September 6, 2018 in Ottawa, Ontario

APPEARANCES:

Parties	Representative
Barbara Langley (21A Hampton Avenue)	Self-represented
Robert Hollingshead and Ann Hollingshead (21B Hampton Avenue)	Self-represented
MPAC	Katherine Kennedy-Boisvert
City of Ottawa	No one appeared

DECISION OF THE BOARD DELIVERED BY JOSEPH JEBREEN

OVERVIEW

1Robert Hollingshead and Ann Hollingshead (the “Hollingshead Appellants”) appeal the assessment of their property located at 21B Hampton Avenue in the City of Ottawa (the “Hollingshead Property”). Walter and Barbara Langley (the “Langley Appellants”) appeal the assessment of their property located at 21A Hampton Avenue in the City of Ottawa (the “Langley Property”). Both appeals are made pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A. 31 Act (the “Act”) for the 2017 taxation year. The Appellants have also been deemed to have brought appeals for the 2018 and 2019 taxation years pursuant to clause 40(26)(b) of the Act because the 2017 appeals were not finally disposed of before March 31, 2019.

2At the hearing, the parties submitted that the appeals of both the Hollingshead Property and the Langley Property be heard together. The Appellants stated that they were relying on substantially the same evidence and submissions and MPAC stated that their valuation and equity reports were substantially the same. I agreed to hear the appeals together and the hearing proceeded on that basis.

3Mr. Hollingshead presented evidence and made submissions on behalf of all of the Appellants. The Langley Appellants relied on the evidence and submissions of Mr. Hollingshead, and Mr. Langley provided additional but brief testimony and submissions that applied only to the Langley Property. Unless specifically stated otherwise in this decision, I shall refer to Hollingshead Property and the Langley Property as the “Properties” and I shall refer to all of the appellants as the “Appellants.”

4MPAC returned an assessment of $989,000 for the 2017 taxation year and assessments of $923,000 for each of the 2018 and 2019 taxation years for the Hollingshead Property and submitted that the January 1, 2016 current value, using the direct comparison approach, was $923,000. The Hollingshead Appellants take the position that the correct current value of their property is $908,000.

5For the Langley Property, MPAC returned an assessment of $969,000 for the 2017 taxation year and assessments of $908,000 for each of the 2018 and 2019 taxation years and submitted that the January 1, 2016 current value, using the direct comparison approach, was $908,000. The Langley Appellants do not dispute MPAC’s current value determination.

6However, the Appellants submit that there is a significant inequity that arises for the Properties in that other similar properties in the vicinity are assessed at lower values. The Appellants submit that the evidence requires a downward adjustment to the current values of the Properties to make them equitable. MPAC submits that no equitable adjustments are required for the Properties.

7For the reasons that follow, I find that MPAC has failed to discharge its statutory burden to prove the correctness of the current values of the Properties. Following the framework set out in Jay Patry Enterprises Inc. v Municipal Property Assessment Corporation, Region 05, 2019 CanLII 39629 (ON ARB), 2018 CanLII 70338 (ON ARB) WR 152892 (“Patry Enterprises”) on the appropriate steps to take when MPAC has failed to meet its burden, I further find that the Appellants have provided sufficient evidence to prove that particular current values of the Properties are more likely than not. The Appellants’ evidence supports a current value of $925,000 for both Properties.

8Finally, I find that an adjustment is required in order to make the assessments equitable with the assessments of similar land in the vicinity. I find that the equitable assessments of both Properties are $786,000 for the 2017, 2018, and 2019 taxation years.

9I therefore reduce the assessments of both Properties to $786,000 for the 2017, 2018 and 2019 taxation years.

BACKGROUND OF THE PROPERTIES

10The Hollingshead Property has a frontage of 25 feet and a depth of 96 feet for a total area of 0.06 acres. The dwelling is a 2,190 square foot semi-detached infill that was built in 2015. The dwelling has 3 bedrooms, 3.5 baths, 1 fireplace and air conditioning. It has a finished basement area of 339 square feet and an attached garage that was built in 2015 measuring 260 square feet.

11The Langley Property has a frontage of 25 feet and a depth of 96 feet for a total area of 0.06 acres. MPAC’s evidence is that the dwelling is a 2,123 square foot semi-detached infill that was built in 2015. The Appellants dispute that there is any meaningful difference in square footage between the Properties. The dwelling has 3 bedrooms, 3.5 baths, 1 fireplace and air conditioning. It has a finished basement area of 339 square feet and an attached garage that was built in 2015 measuring 260 square feet.

12The Properties are each mirror halves of one another that share a common wall. The pictures in evidence show some different exterior finishes but they have the same layout and Mr. Hollingshead confirmed in his testimony that they are essentially the same properties.

13MPAC’s own data supports a finding that the Properties are substantially the same. The only difference between the Properties that was pointed out by MPAC is that the Hollingshead Property is 67 square feet larger. MPAC’s submission is that this larger area including the 10 extra square feet on the first level of the Hollingshead Property accounts for the difference in current values that it proposes for the Properties. I am not convinced that there are meaningful differences between the Properties and I do not accept that the Properties have different current values based on such a small difference in square footage, even if that difference exists. The Properties have the same lot size and the dwellings are two connected semi-detached infills that were purchased from the same builder and are substantially the same not only in terms of layout, quality, size, finished basement, and year built, but even smaller features such as bedrooms, bathrooms, fireplaces and air conditioning. I consider the Properties to be substantially the same.

ISSUE

14The issues to be determined in this appeal are:

I. What is the correct current value of the Properties for the 2017, 2018, and 2019 taxation years?

II. Should there be an equitable reduction of the current value of the Properties pursuant to clause 44(3)(b) of the Act? If so, what should this reduction be?

LAW AND ANALYSIS

Current Value

15Subsection 40(17) of the Act states that MPAC has the burden of proving “the correctness of the current value of the land.” As this Board found in Patry Enterprises at paragraph 21, the burden is around “current value” and not MPAC’s assessment. That is, MPAC is not required to prove the correctness of its returned assessment. It is required to prove the correctness of “the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length from a willing seller to a willing buyer.”

16Patry Enterprises summarizes the procedure to follow in an appeal where current value is at issue, at paragraph 40:

…first look at MPAC’s evidence on its own and make a determination as to whether it can prove its suggested current value on a balance of probabilities. If MPAC meets its burden, the Board should review all of the evidence before it and determine the current value of the property. However, if MPAC has not met its burden, the taxpayer’s evidence must be analyzed to see if it is capable of proving that a particular current value is more likely than not. If there is insufficient evidence in the record that is capable of proving current value, the Board should fix the assessment at the last uncontested assessed value.

17I will follow that procedure here.

Can MPAC’s evidence prove its suggested current value?

18As stated in Patry Enterprises, at paragraph 23, in order for MPAC to meet its burden, MPAC’s evidence “must show how the current value MPAC is proposing is arrived at and why that value is correct. Without this bare minimum, the Board cannot possibly determine if MPAC’s proposed current value is correct.”

19Katherine Kennedy-Boisvert submitted two valuation reports on behalf of MPAC to establish opinions of current value for the Properties. The valuation reports were authored by Jamie Knighton, another MPAC assessor, but Ms. Kennedy-Boisvert adopted all reports in evidence as her own. As with most residential properties, MPAC relied on the direct comparison approach to prove its suggested current value of $923,000 for the Hollingshead Property and $908,000 for the Langley Property.

20To satisfy its burden when using the direct comparison approach, MPAC cannot simply present any properties. It must review the market data and select properties that are in fact comparable. In her valuation reports, Ms. Kennedy-Boisvert relied on the same six suggested comparable properties in her current value analyses for both Properties. I do not consider Sale 6 to be comparable to the Properties because it has a four storey dwelling that is part of a complex of buildings. Such a property would transact differently than two-story infills such as the Properties. The remaining five sales presented by MPAC are summarized in the table below:

Feature	Hollingshead Property	Langley Property	Sale 1	Sale 2	Sale 3	Sale 4	Sale 5
Date sold			06/20/2014	10/16/2015	07/31/2013	12/10/2015	07/18/2013
Sale price ($)			930,000	925,000	785,000	832,000	795,000
Time adjusted sale price ($)			970,320	930,223	840,706	832,935	851,416
Address	21B Hampton Avenue	21A Hampton Avenue	47A Granville Avenue	47B Granville Avenue	386 Mayfair Avenue	387 Piccadilly Avenue	403 Piccadilly Avenue
Distance from Property (kilometres)			0.14	0.14	0.21	0.25	0.26
Lot area (Acres)	0.06	0.06	0.06	0.06	0.05	0.06	0.04
Frontage/Depth (feet)	25/96	25/96	25/96	25/96	24/80	21/114	21/74
Number of storeys	2	2	2	2	2	2	2
Building area (square feet)	2,190	2,123	1,980	1,980	1,716	1,672	1,593
Year built	2015	2015	2014	2014	2010	2010	2010
Bedrooms/ Bathrooms	3/3.5	3/3.5	3/3.5	3/3.5	2/2.5	2/3	2/2.5
Basement area (square feet)	949	949	932	932	800	836	802
Finished Basement area (square feet)	339	339	474	474	255	362	254
Secondary structure type	Attached garage	Attached garage	Attached garage	Attached garage	Basement garage	Attached garage	Attached garage
Secondary structure year built/area (square feet)	2015/260	2015/260	2014/316	2014/316	2010/345	2010/311	2010/349

21These five comparable sales are all infill semi-detached two-storey dwellings that are located within 0.3 kilometres of the Properties. However, Sales 1, 3 and 5 occurred outside of the shoulder years of 2015 and 2016. Nevertheless, based on this data, I am satisfied that MPAC has presented sufficiently comparable properties in this case to be the subject of a direct comparison analysis.

22The problem in MPAC’s evidence is that Ms. Kennedy-Boisvert did not use a direct comparison approach to arrive at her proposed current values of $923,000 for the Hollingshead Property and $908,000 for the Langley Property.

23On cross-examination, Mr. Hollingshead asked how there could be two different current values for the Properties when MPAC relied on the same six comparable properties to determine the current values based on the direct comparison approach. Ms. Kennedy-Boisvert admitted that the different current values for the Properties were provided by MPAC’s computer model and that she was at the hearing to defend those values. She could not explain the difference in values of the Properties using a direct comparison approach.

24Mr. Hollingshead also asked how MPAC arrived at a value of $923,000 for the Hollingshead Property. Ms. Kennedy-Boisvert indicated that she calculated a time adjusted assessment to sales ratio for each of the six comparable properties. Since the median of the six ratios was within the range of 0.95 and 1.05, she concluded that they were comparable. I disagree that this is a valid method of determining whether a property is comparable. MPAC did not explain how a sales ratio analysis can be used to determine whether a property is comparable. Ratios could be within the range of 0.95 to 1.05 and be too different to compare using a direct comparison approach.

25Even if I were to accept this approach, which I do not, MPAC’s method is not supported by its own evidence. The time adjusted sales ratios of Sales 1 to 6 are: 0.9036, 0.9427, 0.925, 0.9436, 0.8593 and 0.9783. The median of this dataset is 0.934. The median does not fall within the range of 0.95 and 1.05 as proposed by MPAC. Further, a cursory review of these ratios reveals that all of the ratios, except Sale 6, are below 0.95. I have already found that Sale 6 is not an appropriate comparable property and so the median would be even lower than 0.93. Again, I do not rely on this method of determining current value, however, the method is not supported by the evidence.

26In the valuation reports, MPAC purports to rely on the direct comparison approach but that is not what has happened. There was no explanation provided as to how the six comparable properties resulted in the proposed current values of the Properties. At its best, MPAC’s evidence is that the current values were arrived at by their computer model and that MPAC was defending those values. This is not sufficient to discharge MPAC’s burden. MPAC could not provide a pathway, using the direct comparison approach, to arrive at the proposed current values for either the Hollingshead Property or the Langley Property.

27MPAC relied on the Board’s decisions in Cogan v Municipal Property Assessment Corporation, Region No. 03, (DM 32084 – July 22, 2004 – unreported) and Auerbach v Municipal Property Assessment Corp. Region No. 03, [2010] O.A.R.B.D. No 449 for the proposition that MPAC’s computer model is not under appeal. I accept that MPAC’s model is not under appeal. However, the Appellants were not challenging the model. Throughout their evidence and submissions, the Appellants tried to understand how MPAC arrived at the proposed current values using a direct comparison approach.

28MPAC regularly asserts that its model is not under appeal. It cannot then rely on the model to come to a current value. There is no evidence before the Board on the accuracy of the model and so MPAC cannot rely on the value obtained by the model. It must present an acceptable valuation methodology and show “how the current value [it] is proposing is arrived at and why that value is correct”. It has not done so.

29The minimum threshold in Patry Enterprises is not met, and so I find that MPAC has not met its burden for the Properties.

Does the taxpayer’s evidence prove a current value?

30Following the framework in Patry Enterprises, if MPAC has not met its burden, I must analyze the Appellants’ evidence to see if it is capable of proving that a particular current value is more likely than not.

31The Appellants primarily rely on the purchases of their Properties as the best evidence of current value of the Properties. They do not rely on comparable properties. I agree with this approach because the sales prices of the Properties are the best evidence of current values.

32The Hollingshead Appellants purchased the Hollingshead Property from a builder, Haslett Construction Inc., on December 15, 2015 for $908,000. The Langley Appellants also purchased the Langley Property from Haslett Construction Inc. on January 28, 2016 for $920,000.

33The difference in sales prices of the Properties is attributed to the differences in rebates provided to each of the Properties. The Appellants provided both agreements of purchase and sale and their statements of adjustment into evidence. Both Properties were purchased for agreed sales prices of $925,000. However, the agreement with the Hollingshead Appellants allows for a rebate totalling $16,695 for a total purchase price of $908,305 whereas the agreement with the Langley Appellants allows for a rebate totalling $5,000 for a total purchase price of $920,000. The Langley Appellants were credited for decorating and appliances. The Hollingshead Appellants were credited for decorating and appliances, as well as landscaping and a fireplace.

34These two sales are the best evidence of current value for the Properties. They occurred within one month of the January 1, 2016 valuation day. However, property in Ontario is assessed as it was on the state and condition day for a particular taxation year. As set out in subsection 36(2) of the Act, the state and condition day is “the second Tuesday following December 1.” So, for the 2017 taxation year, the question is what the Properties would have sold for on January 1, 2016 in the state and condition they were in on December 13, 2016.

35The Properties were not in the same condition on the state and condition day for the 2017 taxation year as they were when sold to the Appellants. By December of 2016, I find that the Properties were nearly identical. The rebates taken off of the $925,000 purchase prices would all have been added to the Properties by December 2016. That is, the decorating and the landscaping would have been completed, and the appliances and fireplace would have been installed. The pictures in evidence show similar landscaping on the Properties and the Appellants confirmed that their kitchens were equipped with appliances. The fact that both Properties were purchased for the same price supports the conclusion that there is no difference in current value.

36Even though the sales occurred so close to the valuation day, MPAC does not consider these sales as open market sales. On cross-examination, Ms. Kennedy-Boisvert stated that MPAC does not consider builder sales as open market sales. Mr. Hollingshead asked for supporting authority for excluding builder sales but Ms. Kennedy-Boisvert could not provide one.

37Ms. Kennedy-Boisvert’s reasons for excluding builder sales are that (i) there could be bonuses unrelated to the real estate being purchased such as appliances, and (ii) there could be fluctuations in the market from the beginning to the middle to the end of the sales period such that a sale from a builder is unreliable.

38I am not convinced that these reasons justify an automatic rejection of a sale as evidence of current value. First, any bonuses such as appliances are no different than resale transactions. In real estate transactions, appliances are often included as part of the purchase price and there is no indication that MPAC discounts those sales to account for appliances. In any event, there could be evidence relating to any extras included as part of the purchase price and they can be accounted for, as they are here. Second, if the price of a new build decreases over time because a builder cannot sell it, that is a direct result of the market. The fact that a property stays on the market for some time and decreases in price is not a reason for disqualifying a sale. To the contrary, this is an indication that the sale price is in fact an open market transaction.

39As pointed out by Mr. Hollingshead, the Act states that current value is “the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length from a willing seller to a willing buyer.” This definition does not exclude builder sales. Builders are a large part of the real estate market and a sale from a builder certainly fits within the definition of current value.

40The Appellants testified that the Properties were listed on the Multiple Listing Service by a real estate agent in March 2015, that the Properties were exposed for a period of time and that the purchase prices of $925,000 were eventually agreed upon, with some rebate adjustments for the state of each Property at that time. These are indications that the Properties were purchased in an open market.

41Further, the sales in this case are sales from the builder to the Appellants and involve the Properties that are the subject of these appeals. These are not just comparable properties; they are the Properties under appeal. Such strong evidence of current value should not be automatically discounted.

42For reasons given in previous decisions¹, I do not accept the time adjustment study presented by MPAC and I do not adjust the sale prices with MPAC’s proposed time adjustment factors. In any event these sales are within 1 month of the valuation day and do not require time adjustments.

43I find that the builder sales of the Properties are the best evidence of current value and so the current values of the Hollingshead Property and the Langley Property are $925,000.

Equity

44Section 44(3)(b) of the Act requires me to consider whether an equitable adjustment to the current value is required:

44(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,

(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.

45Ms. Kennedy-Boisvert submits that the proper test for “similar lands in the vicinity” for equity purposes is that the properties only need to be of the same general nature, character or function as the Property. This is not the correct test for determining similar lands in the vicinity.

46In Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299 (“Loblaw”), the Divisional Court specifically considered whether the test of “the same general nature, character or function” was approved by the Supreme Court of Canada in Ontario (Regional Assessment Commissioner v. Downtown Oshawa Property Owners, [1978] 2 SCR 1030, 1978 CanLII 36 (SCC) (“Downtown Oshawa”). The Divisional Court found, at paragraph 22, that the Supreme Court of Canada in Downtown Oshawa did not adopt the test of “the same general nature, character or function” as set out by the Court of Appeal in that case. Rather, the Supreme Court of Canada referred to “many points of comparison” in determining whether properties were similar. The Divisional Court further found, at paragraph 26, that the Downtown Oshawa Decision “does not decide the appropriate test.”

47The Divisional Court in Loblaw confirmed, at paragraph 25, that the “the proper approach to be taken to determining what are “similar lands in the vicinity” is… that all points of comparison must be considered.”

48The Divisional Court further found, at paragraph 25, that a single point of similarity, such as use, is not necessarily determinative of what “similar lands in the vicinity” are.

49MPAC and the Appellants both filed equity evidence relying on Sales to Assessment Ratios. MPAC provided two separate equity studies. I do not find those reports to be reliable.

50For the Langley Property, MPAC provided the sales and assessments of 31 properties in the area. For the Hollingshead Property MPAC provided the sales and assessments of 30 properties. MPAC could not explain the difference in approach.

51There are concerning differences between the two equity studies. The information for 156 Holland Avenue differs between the two reports. In the report for the Langley Property, MPAC uses a sale of that property from June 2016, while in the report for the Hollingshead Property it uses a sale of that property from May 2013. Those lead to different ratios but there was no explanation as to why different sales were used. In the report for the Hollingshead Property, two separate sales of the property at 31 Kenora Street are used, one in December 2014 and another in July 2015. Only the July 2015 sale is used in the report for the Langley Property. Finally, both 38 Helena Street and 135 Clarendon Drive only appear in the report for the Langley Property.

52Additionally, the Appellants provided tables highlighting the size and age of the buildings on the properties in MPAC’s reports. Those tables show that all but nine of the 31 properties presented have buildings that are more than 20 years older than the Properties and nearly all have significantly smaller buildings than those on the Properties. I cannot rely on MPAC’s conclusion that equity is achieved from a sample of such dissimilar properties.

53As noted above, an equity analysis must look at all points of comparison in determining what are similar properties in the vicinity. The Appellants provided 18 properties to consider, which included some of the properties submitted by MPAC. To obtain that list of 18 properties, the Appellants drove around their neighbourhood and included all infill properties with semi-detached two storey dwellings. I find that the points of comparison that must be considered for similar lands in the vicinity are:

a. Properties with semi-detached two storey dwellings;

b. Properties that were built within five years of the Properties, which is between 2010 and 2019;

c. Properties with buildings within 30% of the square footage of the Properties, which is between 1,486 square feet and 2,847 square feet; and

d. Properties within 2 kilometres of the Property.

54The properties in evidence that meet those points of comparison are:

	Address	Year Built	Size (sq. ft.)	Assessment	Sale Price	Sale Date	Ratio
1	403 Piccadilly Ave	2010	1,593	$732,000	$785,000	Jul 2013	0.9325
2	386 Mayfair Ave	2010	1,716	$778,000	$785,000	Jul 2013	0.9911
3	47A Granville Ave	2014	1,980	$877,000	$930,000	Jun 2014	0.9430
4	428 Byron Ave	2014	2,132	$645,000	$742,478	Dec 14	0.8687
5	438 Bevan Ave	2015	1,988	$623,000	$677,306	Mar 15	0.9198
6	384 Byron Ave	2012	2,564	$708,000	$885,000	Jun 2015	0.8000
7	382 Byron Ave	2012	2,558	$705,000	$860,000	Jun 2015	0.8198
8	440 Bevan Ave	2015	1,948	$618,000	$672,881	Jun 2015	0.9184
9	31 Kenora Street	2013	2,038	$838,000	$915,000	Jul 2015	0.9158
10	47B Granville Ave	2014	1,980	$877,000	$925,000	Oct 2015	0.9481
11	387 Piccadilly Ave	2010	1,672	$786,000	$832,000	Dec 2015	0.9447
12	65 Clarendon Ave	2011	1,569	$770,000	$999,990	Jan 2016	0.7700
13	420 Athlone Ave	2015	1,985	$624,000	$875,000	Mar 2016	0.7131
14	63 Clarendon Ave	2011	1,569	$764,000	$995,000	Apr 2016	0.7678
15	125 Bassett Lane	2010	2,139	$860,000	$892,000	Jul 2016	0.9641
16	422 Athlone Ave	2015	1,985	$624,000	$870,000	Jul 2016	0.7172
17	416 Edgewood Ave	2014	1,735	$622,000	$779,456	Mar 2017	0.7980
18	414 Edgewood Ave	2014	1,735	$622,000	$795,000	Apr 2017	0.7824
19	426 Byron Ave	2014	2,132	$648,000	$870,000	Sep 2017	0.7448

55I note that 420 and 422 Athlone Avenue were assessed at $624,000 initially and had their assessment later changed to $789,000. I find that the assessment as originally returned is the appropriate metric for testing the fairness of assessments in the vicinity. The fact that MPAC later gets an assessment closer to its true value does not change the fact that the assessment initially provided that taxpayer with a lower tax burden than others. Fairness requires that similar property be assessed at a similar level of assessment. While assessments will change, using MPAC’s initial attempt at the assessment is the best metric.

56All of the properties set out in the table meet the points of comparison criteria set out above and are therefore similar property in the vicinity of the Properties. Both parties time adjusted the sale amounts but, as noted above, I do not accept MPAC’s time adjustment factors. Instead, I prefer to only look at properties that sold within one year of the January 1, 2016 valuation day. That is, only sales that took place in 2015 or 2016 should be considered for the Assessment to Sale Ratio analysis. I have sorted the properties in the chart above by their sale date. Only Sales 5 through 16 took place in that time frame. I will only consider those 12 sales in my analysis. Although a sample of 12 properties is small, I accept that it is sufficient for the purposes of determining whether an inequity exists as between the assessments of the Properties and the assessments of similar lands in the vicinity.

57The role of an Assessment to Sale Ratio is to see how close assessments of similar property are to the value of those properties. If other property is, on average, assessed significantly below its value it would also be fair to assess the Properties below their current values. Determining the average state of the assessments of the other property is a statistical exercise.

58Both MPAC and the Appellants relied on the median as the best measure of central tendency. The median assessment of the 12 similar properties that sold within a year of the valuation day is 0.8678. The mean of those ratios is 0.8499. The 95% confidence range for this sample is 0.0535, meaning that there is a 95% chance that the true median Assessment to Sale Ratio is between 0.8143 and 0.9213 and a 95% chance that the true mean Assessment to Sale Ratio is between 0.7964 and 0.9034. It is nearly certain that similar property in the vicinity is assessed significantly below its actual value. Further, the coefficient of dispersion is 9.8, which falls within the acceptable range of 5.0 to 15.0 for single family residential properties. This means that the dataset is uniform.

59The median and the mean are both accepted measures of central tendency. Unless a given dataset justifies the use of the median, I generally prefer to rely upon the mean because it accounts for the value of each member of the sample. A median only looks at how many of the sample fall on each side of the middle. This is not a case where there are many outliers in the data or where there are concerns regarding uniformity. A mean is a more meaningful measure of central tendency when, as here, the dataset falls within a normal distribution. The evidence therefore indicates that a similar property is assessed, on average, at 85% of its current value. It would be fair to also assess the Properties at 85% of their current values.

60I have found the current values of both the Hollingshead Property and the Langley Property are $925,000. A fair assessment, given the state of similar property in the vicinity, would be at 85% of those values. I therefore find that the equitable assessments of the Hollingshead Property and the Langley Property are $786,250, or $786,000 rounded.

Phase In

61The Appellants argued that the phase in values for the 2017, 2018, 2019 and 2020 taxation years should be adjusted. Phase in values are governed by section 19.1 of the Act. Subsection 19.1(3) is clear that increases in value over general reassessment periods are phased in at 25% per taxation year.

62The Appellants also argued that the starting value for the phase in calculation, being the January 1, 2012 current value of the Properties, should be adjusted. That is something within the jurisdiction of this Board, pursuant to section 50 of the General Regulation, O Reg 282/98. The Board explained in Participating Holdings Limited and TICC Limited v Municipal Property Assessment Corporation, Region 15, 2017 CanLII 19955 (ON ARB) at paragraph 25, that changes to the “start point value are necessary to ensure that eligible increases are only a result of market change owing to the general reassessment.” That is, the purpose of an alteration of the start point is to see that any phased in increase in value is only due to the passage of time and not a result of changes to the property.

63The Appellants are not arguing that anything changed at the Properties between the 2012 assessments and now. Instead, they are submitting that the start values should be reduced in a similar way to how the assessments here were reduced. That is not how the Regulation is set out. There is also no increase here to phase in because the equitable assessments are less than the 2012 assessments. Subsection 19.1(3) only applies when there is an increase. There will be no phasing in of these new assessments.

CONCLUSION

64MPAC has failed to meet its burden to prove the correctness of the January 1, 2016 current values for the Properties. However, the Appellants have provided sufficient evidence to prove current values of $925,000 for the Properties.

65I find that an adjustment to 85% of the current values is required in order to make the assessments equitable with the assessments of similar land in the vicinity. Those equitable assessments are $786,000.

66I therefore reduce the assessments of the Hollingshead Property to $786,000 for the 2017, 2018 and 2019 taxation years. I similarly reduce the assessments of the Langley Property to $786,000 for the 2017, 2018 and 2019 taxation years.

Footnotes

1. 1See Bernier v Municipal Property Assessment Corporation, Region 2, 2018 CanLII 107728 (ON ARB) at paras 47-55; Patrick v Municipal Property Assessment Corporation, Region 02, 2019 CanLII 7194 (ON ARB) at paras 31-37; Patrick v Municipal Property Assessment Corporation, Region 02, 2019 CanLII 7196 (ON ARB) at paras 30-36.