Nelson Stewart Taddeo v. Municipal Property Assessment Corporation ("MPAC") Region No. 32 and Township of Ignace, 2019 CanLII 94114

Assessment Review Board

Issue Date: October 03, 2019 File No.: WR 161797

Assessed Person(s): Nelson Stewart Taddeo Appellant(s): Nelson Stewart Taddeo Respondent(s): Municipal Property Assessment Corporation ("MPAC") Region No. 32 Respondent(s): Township of Ignace

Property Location(s): Plan M119 PT LOT 141 LYING Municipality(ies): Township of Ignace Roll Number(s): 6001-000-001-25200-0000 Appeal Number(s): 3260576, 3314938 and 3368203 Taxation Year(s): 2017, 2018 and 2019 Hearing Event No.: 718666

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

Heard: July 15, 2019 by telephone conference call

Appearances

Parties	Representative
Nelson Stewart Taddeo	Self-represented
MPAC	Shelby Roper and Carlene Steiner
Township of Ignace	No one appeared

Decision of the Board Delivered by Subuola Awoleri

Introduction

1Nelson Taddeo, (the "Appellant") is the owner of the vacant residential lot legally described as Plan M119 PT LOT 141 LYING (the "Subject Property"). The Subject Property is a vacant residential land with an effective and actual site area of 67.33 acres.

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").

3The Appellant appeals the 2017, 2018 and 2019 assessment of the Subject Property on the grounds that the assessment is too high. The Subject Property was assessed by MPAC at $16,200 for the January 1, 2016 valuation date. Shelby Roper, MPAC's advocate, requests that the Board confirms the assessment of the Subject Property as returned.

4Pursuant to s. 40(11) of the Act, the Municipality, (in this case, the Township of Ignace) is a party to this proceeding. However, the Township did not advise the Board of its position on this appeal and no one appeared at the hearing on the Township's behalf.

5At the completion of the hearing, the Board reserved its decision.

Issue

6The issues to be determined are:

i) What is the correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years?

ii) Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?

Decision

7The Board determines the correct current value of the Subject Property for the 2017, 2018 and 2019 taxation years to be $16,200.

8The Board finds that this assessment at current value is equitable with the assessments of similar lands in the vicinity, and therefore no further reduction is required to achieve equity.

Reasons for Decision

Legislation

9In accordance with s. 44.(3)(a) of the Act, the first mandate of the Board is to determine "the current value of the land." Section 1 of the Act defines current value as "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." That is, for the 2017, 2018 and 2019 taxation years, the Board must determine what the Subject Property would have sold for in an arm's length transaction on the January 1, 2016 valuation day set by the Act.

10The second mandate of the Board is provided in s. 44.(3)(b) of the Act which provides:

... The Board shall ... 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.

11Section 19.2(1)4 of the Act prescribes the valuation days, which provides:

Valuation days

19.2(1) Subject to subsection (5), the day as of which land is valued for a taxation year is ...: For the period consisting of the four taxation years from 2017 to 2020, land is valued as of January 1, 2016.

12Section 40.(17) of the Act places "the burden of proof as to the correctness of current value" on MPAC.

Issue No. 1: What is the correct current value of the Subject Property for the taxation years 2017, 2018 and 2019

Current Value – Evidence and Analysis

MPAC's Evidence and Submissions

13Carlene Steiner, MPAC's witness prepared a valuation report respecting the Subject Property dated March 14, 2019, which she submitted into evidence.

14Ms. Steiner testified that she has been a property valuation specialist as an employee of MPAC for over 25 years and one of the municipalities which she is responsible for is the Kenora district of Northwestern Ontario, where the Subject Property is located. She testified that there has been no recent sale of large vacant residential land in the Township. She also testified that she carried out an inspection of the Subject Property on March 17, 2017 and she observed that it is a levelled piece of property; there were trees on it and a "For Sale" sign. During the inspection, she asked the Appellant what he intends to obtain from the sale of the Subject Property but the Appellant did not provide a response.

15Ms. Steiner further testified that the market in the Township is flat, there has been no increase in market values over time and there have been insufficient sales to provide a time adjustment analysis. Consequently, Ms. Steiner added that in providing the current value of the Subject Property, MPAC reviewed the valuation of similar types of properties, the historical valuation of the Subject Property and local knowledge of the area.

16Ms. Steiner testified that historically the Subject Property has been valued in the range of $25,000 to $35,000. She added that the 2008 current value assessment ("CVA") was $25,000; however, due to an error in the assessment process, the Subject Property was valued at $3,800 for the 2012 CVA. Ms. Steiner further testified that during the assessment process of the 2012 CVA, all vacant land in the Township received a downward adjustment of (-85%), and erroneously, the Subject Property was also included with standard size lots to obtain this downward adjustment. She emphasized that there was no economic evidence to support this substantial reduction, however, the error was not corrected and according to Ms. Steiner, this is one of the issues the Appellant has regarding the increase in the assessment of the Subject Property for the January 1, 2016 CVA.

17Ms. Steiner further testified that she used 16 sales of smaller vacant lands in the Township, which sold from 2009 to 2019 as a benchmark for determining the correct current value for the Subject Property. According to Ms. Steiner, these smaller vacant lands measured 0.15 acres and smaller and the median sale amount is $2,250. She testified that during this period the market did not change in Ignace Township. Ms. Steiner also used 14 sales of vacant land with larger lots greater than 10 acres but less than 70 acres in a similar economic neighbourhood, not necessarily in Ignace Township to support the assessment of the Subject Property. She testified that the median of these 14 sales is $21,208. Ms. Steiner concluded that the sales of these smaller and larger lots demonstrate that the assessment of the Subject Property is correct.

Appellant's Submissions

18The Appellant did not serve and file any evidence. He used MPAC's valuation report to make his submissions to the Board.

19The Appellant submitted that MPAC has not proved that the assessment of the Subject Property is correct. He stated that MPAC has not justified with evidence the reason the Subject Property has a 350% increase from the 2012 CVA of $3,800 to $16,200 for the 2016 CVA. He further questioned why the error as claimed by MPAC was not rectified. He submitted that no one advised him of this error. Ms. Steiner testified that she does not recall that the Appellant raised this issue prior to the hearing. Ms. Roper advised the Board that the Appellant did not file or serve a Statement of Issues and accordingly, MPAC could not provide a Statement of Response. Consequently, MPAC could not have perceived this was part of the Appellant's issue with the 2016 valuation of the Subject Property.

20The Appellant further submitted that the description of the Township of Ignace was not accurate in MPAC's valuation report. He testified that the Township has been stagnant since the closure of the mine over 20 years ago.

21The Appellant testified that Ms. Steiner did not accurately provide the Board with information regarding the condition of the Subject Property. He submitted that MPAC omitted the fact that the Subject Property has a hazardous designation Ms. Roper objected to the Appellant raising this new issue at the hearing citing Rule 49 of the Board's Rules of Practice and Procedure (the "Rules") which provides:

An issue can only be raised at a hearing event if it has been set out in the statements of issue and response which have been served, and filed with the Board in accordance with these Rules, unless the Board determines that there are exceptional circumstances.

22The Appellant cross-examined Ms. Steiner regarding MPAC's valuation report, asking if there are issues that could affect the marketability of the Subject Property. Ms. Steiner testified that she is not aware of any.

23The Appellant further testified that there have been no bona fide offers for the Subject Property; consequently, he could not provide a value for the Subject Property. He added that the lack of market activity affects the Subject Property's market value and there are special conditions on the Subject Property that further depreciates its value, such as the creek and hydro line that were not included in MPAC's valuation report. He concluded by submitting that it is difficult to sell the Subject Property if the municipality is prepared to sell its properties at a giveaway price of $1,000. Ms. Steiner advised the Board that she is not aware of this fact and that the Appellant has not provided any evidence to prove it.

24Ms. Roper submitted that the Appellant has not provided any evidence to quantify any downward adjustment to the current value of the Subject Property and his submissions are mere opinions and the Board should attach little weight to it.

Findings on Issue 1

Board's Analysis – Correct Current Value

25Under 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. 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 sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

26Apart from his testimony, the Appellant did not provide any evidence neither did he present any comparable market sales. He submitted that the Township is selling its properties for a minimal amount of $1,000 and in such a flat market, he cannot provide a value for the Subject Property. The Township was not represented at the hearing to provide evidence of these sales (if any), neither did the Appellant provide any corroborating evidence of sales of these properties. During cross-examination, Ms. Steiner testified that she was not aware of these sales. This was of limited assistance to the Board in determining the correct current value of the Subject Property. The Board puts no weight on this evidence.

27The Appellant testified that the Subject Property has a creek running through it, a hydro line and it has a hazardous designation. He submitted that the Township is in the process of changing its zoning, but did not provide any corroborating evidence. Ms. Steiner testified that she is not aware of the change in the Subject Property's zoning. The Appellant submitted that these special conditions or unique situations on the Subject Property depreciate its market value and these special conditions should qualify for a downward adjustment to the Subject Property's 2016 CVA. The Appellant did not present any evidence that shows these conditions on the Subject Property or how it should be quantified. Moreover, the Board read in its opening statement that it requires evidence to quantify or measure the impact of any unique situation against the assessed value. The Board cannot speculate or arbitrarily calculate an impact to the Appellant's assessed current value.

28The Appellant also submitted that MPAC has not justified the 350% increase from the last 2012 assessment cycle of $3,800 to $16,200. The Appellant suggested that there was more to the error than what MPAC is revealing about it, since MPAC did not attempt to rectify the error. The first mandate of the Board is to determine the correct current value of the Subject Property as of January 1, 2016. The issues of the last assessment cycle are not the subject matter of this appeal; therefore, the Board cannot make a determination about it.

29MPAC has also not presented any sales of comparable properties as the parties confirmed that the market in the Township is flat and there have been no sales of large vacant residential lands. However, MPAC presented 14 sales of lots greater than 10 acres but less than 70 acres to demonstrate that larger vacant lands in a similar economic neighbourhood are selling within the same CVA as the Subject Property. The sale amount for these 14 properties range from $8,990 to $50,000. The Board notes that according to Ms. Steiner's testimony, these properties are not located in the Township of Ignace and as the parties testified the market in the Township has been flat and Ms. Steiner confirmed that there has been no change in the market since 2009. Although Ms. Steiner testified that the economic situations in the towns where these 14 large vacant land sales are located are similar to Ignace Township, the Board finds that the economic situation in the Township is peculiar. As Ms. Steiner testified, MPAC further recognized this peculiar situation of the market in Ignace Township by applying a downward market adjustment of (-49%) to the assessment of the Subject Property. The Board only used these 14 sales to understand the ongoing rate for larger vacant lands in the neighbouring communities.

30Ms. Steiner also presented sales of 16 standard vacant lands, with lot sizes not larger than 0.15 acres, all located in Ignace Township, which sold from 2009 to 2019. The median of these sales is $2,500. These sales have not been time adjusted due to the lack of sales to provide a time adjustment analysis. The sale prices of the 16 standard size vacant lands range from $1,000 to $15,000. If these standard size vacant lands, with lot size of 0.15 acres or less sold for no higher than $15,000, which is $1,200 less that the CVA of the Subject Property which measures 67.33 acres; on the balance of probabilities, it is more probable than not that the current value of the Subject Property should be higher. Based on the best evidence presented by MPAC, the Board determines that the correct current value for the Subject Property is $16,200.

Issue No. 2: Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be.

Equity Analysis

31Section 44.(3)(b) of the Act directs that after determining current value, the Board shall 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."

MPAC's Evidence

32Ms. Steiner did not provide an equity analysis study; however, she testified that she used the assessment of four vacant residential lands to demonstrate that similar lands have been assessed the same. Ms. Steiner presented this evidence in MPAC's valuation report as an equity analysis grid. The details of these four properties are summarized in Table 1 below:

Table 1

Address	Property Code and Description	Assessment ($)	Effective Site Area (Acres)	Actual Site Area (Acres)	Distance from Subject Property (KM)	Access
Subject Property	(100) Vacant Residential Land Not on Water	16, 200	67.33	67.33	N/A	Year Round Road Access
Property 1 unknown	(100) Vacant Residential Land Not on Water	16,000	62.69	62.69	1.5972	Year Round Road Access
Property 2 unknown	(100) Vacant Residential Land Not on Water	15,600	56.5	56.5	unknown	Year Round Road Access
Property 3 400 Davey Lake Road	(100) Vacant Residential Land Not on Water	14,800	39.82	39.82	1.8634	Year Round Road Access
Property 4 702 Pine Street	(100) Vacant Residential Land Not on Water	13,500	13.91	13.91	unknown	Year Round Road Access

33Ms. Steiner testified that Property 1 is the most comparable to the Subject Property due to its size and its year-round road access and that Property 4 is inferior due to its size.

34Ms. Steiner submits that based on the sales of the standard sized lands, the historical assessment of the Subject Property, knowledge of the Township of Ignace and the assessment of the four properties in Table 1, the assessment of the Subject Property is correct and should be confirmed.

Appellant's Submissions

35The Appellant did not provide any evidence but submits that MPAC's four properties are not comparable to the Subject Property, as none of these comparable have the "special situation", such as a creek running through it, a hydro line and a hazardous designation. Ms. Steiner testified that these issues were irrelevant to the CVA of the Subject Property and she is not aware of the Subject Property's hazardous designation

Findings on Issue 2

Board's Analysis- Equity

36The purpose of an equitable reduction has been described by the Ontario Court of Appeal in Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) at page 2:

A prime objective of municipal taxation is the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the application of a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.

37The goal of the Act is to determine the correct current value. Any equitable reduction in the current value results in an incorrect current value. Consequently, an equitable reduction should only be made where there is clear evidence to support that such a reduction is warranted. In this regard, the burden of proof rests with the party that alleges that it would be inequitable to assess the Subject Property at its current value, and in this appeal is the Appellant. The Appellant has to establish, on a balance of probabilities, that an equitable reduction is required.

38For equity, the comparable properties need not be similar as it is needed in the determination of the correct current value. As determined by the Ontario Divisional Court in Municipal Property Assessment Corporation v. Loblaw Properties Limited, 2017 ONSC 1299, applying the decision in Trizec Equities Ltd v Ontario (Regional Assessment Commissioner, Region No 27), [1988] OJ No 182, 27 OAC 203, 37 MPLR 175, 8 ACWS (3d) 399 "...All points of comparison must be considered..." The selection of these four properties are similar to the Subject Property, in terms of location; they are all within the A02-57 vicinity as the Subject Property, use; they are all vacant residential lots, distance; three of the properties are within 1.86 kilometers of the Subject Property except Property 2, which Ms. Steiner could not provide the distance citing mapping issues and they all have year round access.

39Upon reviewing these four properties, the Board determines that the Subject Property has been equitably assessed, as the properties within the size range of the Subject Property were assessed within the Subject Property's current value of $16,200. An equitable reduction of the current value of the Subject Property, pursuant to s. 44.(3)(b) of the Act, is not required.

Conclusion

40Based on all the evidence, the Board determines the correct current value of the Subject Property to be $16,200 and determines that this correct current value is equitable with the assessment of similar properties in the vicinity and therefore no equity adjustment is required.