Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: September 23, 2019
Assessed Person(s): Walter Rodrigues, Lucy Rodrigues
Appellant(s): Walter Rodrigues, Lucy Rodrigues
Respondent(s): Municipal Property Assessment Corporation (“MPAC”) Region 16
Respondent(s): Town of Bradford West Gwillimbury
Property Location(s): 4063 Highway 11
Municipality(ies): Town of Bradford West Gwillimbury
Roll Number(s): 4312-020-003-24400-0000
Appeal Number(s): 3279584
Taxation Year(s): 2017
Hearing Event No.: 700764
Legislative Authority: Section 34 of the Assessment Act, R.S.O. 1990, c. A.31, as amended
Heard: September 7, 2018 in Bradford, Ontario
APPEARANCES:
Parties
Representative
Walter Rodrigues, Lucy Rodrigues
Self-represented
MPAC
Patricia Thompson, Lynda Grimshaw
Town of Bradford West Gwillimbury
No one appeared
DECISION OF THE BOARD DELIVERED BY MARK SPRAGGETT
REASONS
Background
1Walter and Lucy Rodrigues are the owners of 4063 Highway 11 (the “Subject Property”). Formerly vacant land with a shed, the property as of April 2017 contains a newly built detached raised bungalow plus garage.
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 conduct a general re-assessment of the current value of the Subject Property as of the valuation date, January 1, 2016. (“current value”). In this case, MPAC's general re-assessment of current value is $257,000, based on its condition at that time.
3For the January 1, 2017 taxation date, MPAC has conducted a s. 34, supplementary assessment under the Act, of the Subject Property. MPAC recommends a supplementary increase in the assessed value of the Subject Property in the amount of $705,000 thereby adjusting the current value from $257,000 to $962,000. The MPAC representative noted to the Assessment Review Board (“Board”) the incorrect docket value of $974,000, stating that it should read $962,000. The Board notes that for the s. 34 appeal, the docket should read $705,000 as the annual assessment of $257,000 was not appealed.
4Walter and Lucy Rodrigues (the “Appellants”) have filed an appeal for the taxation year 2017 with the Board, pursuant to s. 34 of the Act. In advancing their case, the Appellants adopted a holistic approach, focusing on what the correct current value of the Subject Property should be, i.e. their analysis did not distinguish between the value of the Subject Property in its state and condition as of the valuation date and the subsequent supplementary increase. It is their position that MPAC's assessment of the current value of the Subject Property, which includes the supplementary increase, is too high. They maintain that the correct current value of the Subject Property is between $750,000 and $800,000. At this hearing, MPAC takes the position that both its general and supplementary assessments are correct and, therefore, MPAC maintains that the correct current value of the Subject Property is $962,000.
5Pursuant to s. 40(11) of the Act, the Municipality, in this case, the City of Bradford 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 of 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 Appellants 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 taxation year, as per s. 34, of the Act, the correct supplementary increase in value is $705,000, and, therefore, the correct current value of the Subject Property is $962,000.
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.
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:
- 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.
S. 32 Correction of errors, etc., in assessment roll
- (1) Despite the delivery of any notice provided for under this Act, the assessment corporation at any time before the time fixed for the return of the assessment roll may correct any defect, error, omission or misstatement in any assessment and alter the roll accordingly.
Same, factual error only
(1.1) Despite the delivery of any notice provided for under this Act, for 2009 and subsequent taxation years, the assessment corporation may, at any time during the taxation year, correct any error in the assessment or classification of a property that has resulted from incorrect factual information about the property, and not from a change in opinion as to current value, . . .
S. 33 Change re land omitted from tax roll
(1) The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted:
The assessment corporation shall make any assessment necessary to correct the omission. . . .
S. 34 Supplementary assessments to be added to tax roll
- (1) If, after notices of assessment have been given under section 31 and before the last day of the taxation year for which taxes are levied on the assessment referred to in the notices,
(a) an increase in value occurs which results from the erection, alteration, enlargement or improvement of any building, structure, machinery, equipment or fixture or any portion thereof that commences to be used for any purpose; . . .
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 on this appeal is what is the correct supplementary increase in value of the Subject Property for the taxation year 2017?
Description of the Subject Property
11The Subject Property was formerly vacant land excepting the presence of a shed. As of April 2017, a newly built raised bungalow including a garage is present on the land. MPAC assigns a Quality 7 construction rating for this new build.
12At the time of assessment, the Subject Property had an unfinished basement and no central air conditioning.
Discussion, Analysis and Findings
MPAC’s Evidence
13Lynda Grimshaw, a Property Inspector for MPAC, represented MPAC at the hearing. Patricia Thompson, a Valuation Analyst for MPAC, testified on behalf of MPAC.
14Ms. Thompson filed a Valuation Report (“Report”) dated March 2, 2018 at the hearing.
15Ms. Thompson relied on the Direct Comparison Approach in arriving at her opinion of current value.
16For the Subject Property, Ms. Thompson factored into MPAC’s assessment a downward 3% adjustment to account for it being located on a busy highway, and an upward adjustment of 3% for the abutting farmlands.
17Ms. Thompson stated that for City of Bradford, a number of subdivisions have and continue to be constructed that exceed the standard Quality of construction rating of 6.5, pushing it to a 7.0. For this reason, it is her opinion that the Subject Property too, should be rated a 7.0.
18Using the Direct Comparison Approach, Ms. Thompson identified six proposed comparable properties that sold within the same neighbourhood as the Subject Property, stating that all of them are not only inferior but also between 28 to 36 years older than the Subject Property.
19Ms. Thompson states that, of the suggested comparable properties, the closest comparable property is 3122 Line 9, as it is the most recent property that sold, selling on November 30, 2016 for $998,000. She expressed her opinion that while it too is considered inferior, it suggests that MPAC’s assessment of $962,000 for the Subject Property is not unreasonable.
MPAC’s Submissions
20Relying on its evidence, MPAC submits that the correct current value of the Subject Property for the taxation year 2017 is $962,000.
21MPAC argues that the Subject Property should be assessed much higher than the suggested comparable properties, as they are all inferior to the Subject Property.
22MPAC disputes the Appellants’ seven proposed comparable properties, noting that one is a quality 5.0; one is a quality 6.0; four are a quality 6.5 and one is a quality 7.5.
23MPAC rejects the Appellants’ proposed comparable properties, arguing on age alone, that they are much older than the Subject Property. The oldest is 1963 and the most recent is 1997. MPAC highlights the following issues:
Comparable 1: Quality 6.5; built 1976; 1,761 square feet (“sq. ft.”) house; 1.13 acres
Comparable 2: Quality 7.5; 1975; 2,049 sq. ft. house; 0.74 acres
Comparable 3: Two homes (Quality 6; 1997; 1,065 sq. ft. / Quality 5; 1890; 2,278 sq. ft.); 1.6 acres
Comparable 4: Quality 6.5; 1963; 2,035 sq. ft. house; 1.45 acres
Comparable 5: Quality 6; 1972; 1,423 sq. ft. house; 2 acres
Comparable 6: Quality 6.5; 1991; 2,621 sq. ft. house; 0.88 acre; 2-storey house
Comparable 7: Quality 6.5; 1972; 1,267 sq. ft. house; 1.84 acres
24MPAC noted that the Appellants’ analysis refers to “todays market”, suggesting February 28, 2018 for all pricing data. Upon questioning, the Appellants agreed.
Appellants’ Evidence
25Walter and Lucy Rodrigues, the Appellants, represented themselves. Walter Rodrigues testified on behalf of the Appellants.
26Mr. Rodrigues submitted into evidence a Comparative Market Analysis (“Analysis”), dated February 29, 2018. The document was prepared by a real estate sales representative who was not present at this hearing. Mr. Rodrigues stated that the author of the Analysis was aware of its purpose for this hearing event.
27The Analysis relied on the Direct Comparison Approach in arriving at a current value for the Subject Property.
28Mr. Rodrigues identified a total of seven proposed comparable properties included in the Analysis, of which he believes two offer the best comparability to the Subject Property, namely properties 2 (2361 11th Line) and 3 (2276 12th Line).
29Mr. Rodrigues maintains that the proposed comparable properties are in the same neighbourhood as the Subject Property and are representative of its value.
30The Appellant has highlighted the features of his choice of properties:
1968 12th Line: Slightly smaller lot; near Subject Property;
2361 11th line: Similar; near Subject Property (approximately 2km);
2276 12th Line: Raised bungalow; similar location; approximate lot size;
3984 Hwy 11: Detached bungalow;
4046 20th Side Road: No details;
2464 12th Line: 2-Storey House;
2577 Line 11 Road: No details;
Appellants’ Submissions
31Relying on their evidence, the Appellants submit that the correct current value for taxation year 2017 is between $750,000 and $800,000.
Findings
32The Board has reviewed all of the evidence entered by both parties, recognizing that their respective methodologies are the same, the Direct Comparison Approach. Both parties provided their own proposed comparable properties from which they argued their respective positions 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 Subject 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 sale of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.
34To enable an estimate of value for the Subject Property to be derived from suggested comparable properties, there must be sufficient elements of comparability in terms of physical factors such as building area, land area, land frontage, age of construction, physical condition, etc. so as to enable a direct comparison to be made.
35The Board finds that the Appellants’ proposed comparable properties to be inferior to the Subject Property in terms of age of construction. None of their properties are of recent construction. No information is provided regarding upgrades of any kind to suggest otherwise.
36The Board finds that the Appellants’ two most likely properties comparable to the Subject Property, the raised bungalow, 2276 12th Line and 2361 11th Line, are not suitable comparable properties. The former property, although the same type as the Subject Property, has two houses on its lot, unlike the Subject Property, one built in 1997 and the second in 1890. Their combined floor area is in excess of 3,300 sq. ft., in contrast to 2,300 sq. ft. for the Subject Property. The second most likely comparable proposed by the Appellants is smaller in total floor area, built in 1975 and having a lot size almost one third the size of the Subject Property. For these reasons the Board does not rely on these properties in arriving at the correct current value for the Subject Property.
37The Board finds that the Appellants’ remaining five proposed comparable properties require too many adjustments in terms of age, square footage and building type, to make them suitable for comparison purposes. Furthermore, the Board notes that the Appellants have not made any adjustments to account for differences between these properties and the Subject Property. For these reasons the Board does not rely these proposed properties to determine the correct current value.
38The Board has reviewed MPAC’s proposed comparable properties and similarly concludes they are all inferior, whether in terms of age, finishing, floor area, etc. to the Subject Property. The only property demonstrating some degree of comparableness is 3122 Line 9. Although having a lot size less than half of the Subject Property’s lot size, the house has almost the same total floor area. While much older in construction with no indication of improvements over time, it is the most recent sale (selling in November 2016 for $998,000).
39The Board finds that 3122 Line 9, offers the best evidence available from which to make a determination of the correct current value for the Subject Property. While inferior to the Subject Property, the Board concludes that the Subject Property is valued higher than this property. For this reason, the Board determines the correct current value for the Subject Property to be at least $962,000.
40Based on the correct current value of $962,000 the Board determines MPAC’s supplemental increase of $705,000 in value for the Subject Property, to be supported by the evidence.
DECISION
41The Board finds that for the 2017 taxation year, the supplementary assessment as per s. 34 of the Act, in the amount of $705,000 is correct, and, therefore, the correct current value of the Subject Property is $962,000.
“Mark Spraggett”
MARK SPRAGGETT
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```