Assessment Review Board

Commission de révision de l’évaluation foncière

October 11, 2019

FILE NO.:

WR 159643

Assessed Person(s):

Sylvie Brisson

Appellant(s):

Jean-Luc Brisson and Sylvie Brisson

Respondent(s):

Municipal Property Assessment Corporation (“MPAC”), Region 01

Respondent(s):

Champlain Township

Property Location(s):

1097 Cassburn Road

Municipality(ies):

Champlain Township

Roll Number(s):

0209-007-003-08600-0000

Appeal Number(s):

3328749 and 3345075

Taxation Year(s):

2018 and 2019

Hearing Event No.:

711464

Legislative Authority:

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

Heard:

March 21, 2019 in Vankleek Hill, Ontario

Parties

Counsel⁺/Representative

Jean-Luc Brisson

Self-represented

Michelle Gravelle

Champlain Township

No one appeared

1Jean-Luc Brisson, (“the Appellant”) appeals the assessment of 1097 Cassburn Road (the “subject property”) located in Champlain Township (United Counties of Prescott and Russell) pursuant to s. 40(1)(a)(i) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”) on the grounds that the assessed value of his property is incorrect.

2He states that the subject property’s assessment of $769,000 for the 2018 property tax year is too high, particularly considering previous assessments and that the value of his property is affected by noise from a steel mill 3,500 ft, (approximately 1 kilometer) from his residence which itself generates noise and results in substantial traffic and traffic noise. He also submits that some of the property should have a lower assessment because of swampland and farming use restrictions.

3He has not put in issue the classification of the subject property or its apportionment between the residential property class and the farm class (s. 40 (1)(a) (iv) and (v)).

4The subject property is described by MPAC as Land owned by a non-farmer improved with a non-farm residence with a portion being farmed. It consists of 109.75 acres, of which 38 acres are farmed by a tenant farmer. The remaining 71.75 acres is largely treed land. There is a residence with an open area surrounding the residence. The property is not used for any purpose other than farming and the residence of the owner.

5On the property is a one-and-three-quarter story, 3,724 sq. ft. residence. From the photographs, it is apparent this house is the original stone farm house. According to the Appellant, it was built in 1803. According to MPAC records it was built in 1823. With renovations over time, it has an effective year built of 1937. MPAC states its construction quality to be 7.5. It has three bedrooms and two full bathrooms. It has an outdoor swimming pool and a 996 sq. ft. Type III uninsulated barn built in 1920.

6MPAC has assessed the subject property for the 2018 tax year at $769,000. Because of the Appellant’s Request for Reconsideration, pursuant to s. 39.1 of the Act, MPAC offered to revise the assessment for the 2018 tax year to $642,000. A later site inspection confirmed that the residence is one-and-three-quarter storey and not two storey as the Assessor understood. This resulted in a recalculation of the recommendation to $633,000, a reduction of $9,000 attributable to a decrease in structure value.

7At this hearing MPAC submitted an opinion that the current value of the subject property is $656,000. MPAC is not seeking a finding of this value, recommending instead $633,000. The Appellant submits that the correct current value for the 2018 tax year is $409,000.

8 Section 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.

9Pursuant to s. 40(11) of the Act, Champlain Township is a party to this proceeding. However, it did not advise the Board of its position and no one appeared at the hearing on behalf of the Township.

10The Appellant’s appeal is for the 2018 taxation year. As his appeal was not disposed of by March 31, 2019, s. 40(26) of the Act deems the assessment for the 2019 tax year to have also been appealed.

11At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds that the current value for the 2018 and 2019 tax years is $560,300. Pursuant to s. 44(3)(b) of the Act, an equitable reduction to $501,000 is required.

12The Board reduces the assessment from $769,000 to $501,000 for the 2018 taxation year and reduces the assessment from $642,000 to $501,000 for the 2019 taxation year, allocated $113,100 to the farm property class and $387,900 to the residential property class.

REASONS FOR DECISION

Relevant Legislation

13 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.

14 Section 19(1) of the Act states:

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

15 Section 19(5) of the Act states:

Farm lands and buildings

For the purposes of determining the current value of farm lands used only for farm purposes by the owner or used only for farm purposes by a tenant of the owner and buildings thereon used solely for farm purposes, including the residence of the owner or tenant and of the owner’s or tenant’s employees and their families on the farm lands,

(a) consideration shall be given to the current value of the lands and buildings for farm purposes only;

(b) consideration shall not be given to sales of lands and buildings to persons whose principal occupation is other than farming; and

Land and buildings to be valued as farms

(5.0.1) Land or buildings or both, as prescribed by the Minister, shall be valued as described under subsection (5). 2000, c. 25, s. 5 (2).

16 Section 19.2(1) of the Act states:

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

17 Section 40(17) of the Act states:

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.

18 Section 40(26) of the Act states

40(26) For 2009 and subsequent taxation years, an appellant shall be deemed to have brought the same appeal in respect of a property,

(a) in relation to the assessments under sections 32, 33 and 34 for the year; and

(b) in relation to the assessment, including assessments under sections 32, 33 and 34, for a subsequent taxation year to which the same general reassessment applies, if the appeal is not finally disposed of before March 31 of the subsequent taxation year or, if an assessment has been made under section 32, 33 or 34, before the 90th day after the notice of assessment was mailed. 2008, c. 7, Sched. A.

19 Section 44(3) of the Act states:

44 (3) 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.

ISSUES

20The current value, pursuant to s.19(5) of the Act, of the subject property for the 2018 and 2019 tax years on the legislated valuation day of January 1, 2016.

21Whether an equitable reduction pursuant to s. 44(3) of the Act is required and if so in what amount.

DISCUSSION, ANALYSIS FOR CURRENT VALUE

MPAC’s Case

22MPAC’s witness was Michelle Gravelle, a member of the Municipal Institute of Municipal Assessors (M.I.M.A.) and a property valuation analyst with MPAC (MPAC’s witness). She determined that the income approach was not suitable to determine the subject property’s value as it is difficult to determine how much of any income produced is attributable to buildings, labour, equipment, marketing quota as opposed to only the land. Because of this she sought to determine the value using the Cost approach and the Direct Comparison approach before reconciling the different approaches to arrive at an opinion of value.

The Cost Approach

23Her application of the cost approach had three sections.

The determination of the depreciated value of the buildings using a cost manual.
The determination of the value of the 71.75 acres non-farmed acres using sales of large acreages of vacant rural land.

3.The determination of the value of the farmed 38 acres using farm land values for the various soil classes.

Value of Buildings

24The following table summarizes her original cost estimate of the structures on the subject property:

Improvements

Total Cost New: Single family dwelling $502,697

Unfinished allowance -5% ($25,135)

Total Depreciation: ($143,364)

$334,198

Total Cost New: Outdoor pool $33,358

Total Depreciation: ($24,473)

$ 8,885

Total Cost New: Type III Barn $32,000

Total Depreciation: ($30,080)

$ 1,920

Total Cost New: Summer Kitchen $95,813

Total Depreciation ($54,364)

$41,449

Total Cost Less Depreciation: $386,452

25As MPAC’s witness indicated that the data correction classifying the structure as one-and-three-quarter story as opposed to the assumed two storey resulted in a change in the reconsidered assessment recommendation from $642,000 to $633,000, this downward adjustment of $9,000 is attributed to the structure value and would produce a corrected structure value of $377,452.

Value of Non-Farmed Land

26The value of non-farmed land was arrived at by analysis of the sales of the following five large parcels of rural vacant land in the vicinity:

Subject Property

Property #1

Property #2

Property #3

Property #4

Property #5

Roll Number

020900700308600

020900700105204

020900600508700

020900600306900

020900600306800

020900600900600

Address

1097 CASSBURN RD

2191 CASSBURN RD

1471 COUNTY RD 10

GREENLANE RD

PLEASANT CORNER RD W

CON 9 PT LOT 17

Neighbourhood

F012 - 170

J07 - 302

E01 - 302

F04 - 302

Property Code & Desc.

(261) Land Owned by A Non-Farmer Improved A Non-Farm

(100) Vacant Residential Land Not on Water

(100) Vacant Residential Land Not on Water - bought as farmland

Valuation

Current Value Assessment

$642,000

$144,000

$578,000

$103,000

$102,000

$116,000

Sale

Sale Date

09/26/2016

05/17/2016

08/17/2016

06/21/2016

6/10/2016

Sale Amount

$200,000

$150,000

$105,000

$96,000

$100,000

Site

Actual Site Area (Acres)

109.75

80.00

78.25

46.03

45.19

90.00

Sale price/acre

2500

1917

2281

2124

1111

27In her opinion these five sales were of land similar to the non-farmed land on the subject property. They were large parcels with a large portion, if not all, being tree covered. She determined the median price to be $2,124 per acre. Applying this price to the 71.75 acres of non-farmed land produced a value of $152,397.

Value of Farmed Land

28The value of the 38 acres of farmed land was determined from an analysis of seven farmed acreages as follows:

Subject Property

Property #1

Property #2

Property #3

Property #4

Property #5

Property #6

Property #7

Roll Number

020900700308600

020900600300409

020900600900500

020900700107402

020900700108510

020900600126700

020900600201000

020900700102300

020900700110410

020900700110500

Address

1097 CASSBURN RD

GREENLANE RD E

NIXON RD

CASSBURN RD

RITCHANCE RD

COUNTY RD 4

GREENLANE RD

Neighbourhood

F012 - 170

F016 - 170

F012 - 170

F016 - 170

F012 - 170

Property Code & Desc.

(261) Land Owned By A Non-Farmer Improved With A Non-Farm Residence With A Portion Being Farmed

(200) Farm Property Without Any Buildings/Structures

Valuation

Current Value Assessment

$642,000

$137,000

$216,000

$393,000

$289,000

$392,000

$600,000

$943,000

Sale

Sale Date

06/17/2016

11/13/2015

03/13/2015

07/15/2015

04/15/2014

05/12/2017

09/30/2015

Sale Amount

$230,000

$225,000

$298,000

$220,000

$350,000

$735,000

$1,100,000

ASR

0.60

0.96

1.32

1.31

1.12

0.82

0.86

Site

Actual Site Area (Acres)

109.75

96.21

84.14

93.77

166.78

143.81

Farm Land

Farm Lands Class 1 Area

140.31

Farm Lands Class 2 Area

42.38

53.31

116.78

Farm Lands Class 3 Area

Farm Lands Class 4 Area

Farm Lands Class 5 Area

46.21

17.76

Farm Lands Class 6 Area

14.46

3.5

Sale price/acre

$2,391

$4,500

$3,542

$2,346

$4,167

$4,407

$7,649

29She considered Property 1 to be inferior to the subject farmed land as it was composed exclusively of lower quality Class 4 and 5 soil. She considered Properties 6 and 7 to be superior as they included a large proportion of Class 1 and 2 soil. The median value of the comparable properties 2, 3, 4 and 5 was $3,548. She applied this value to the 38 acres of farmed land to produce an amount of $146,452.

30Her conclusion of value using the Cost Approach was therefore $676,000 (rounded). This was the sum of $ 377,452 for the depreciated cost of buildings and structures, $152,397 for the 71.75 acres of non-farmed land $146,452 for 38 acres of farmed land.

Direct Comparison Approach

31In the direct comparison approach, MPAC’s witness selected sales of properties she considered similar to the subject property and made adjustments for the value of various amenities and land size.

32She selected seven properties. The first three were farm properties and the other properties were rural properties that were not farmed. She included the non-farm properties “Because of the characteristics of the subject property, it is possible that it could sell as either a farm property or a rural residential property.”

33Her comparable sales were as follows:

Subject Property

Property #1

Property #2

Property #3

Roll Number

020900700308600

020900600508725

020900600508800

020900600702200

Address

1097 CASSBURN RD

1402 BORRIS RD

2850 CASSBURN RD

1350 ABERDEEN RD W

Neighbourhood

F012 - 170

F016 - 170

Property Code & Desc.

(261) Land Owned By A

(211) Farm With

Valuation

Current Value Assessment

$642,000

$487,000

$291,000

$527,000

Sale

Sale Date

05/23/2014

10/20/2017

11/20/2015

Sale Amount

$410,000

$392,531

$635,500

ASR

1.19

0.74

0.83

Site

Actual Site Area (Acres)

109.75

17.93

21.44

100

Residential Structure

Structure Code & Desc.

(301) Single Family

Year Built

1823

1990

1910

1900

Effective Year Built

1937

1990

1918

1935

Structure Condition Code

Average

Quality of Construction

7.5

6.5

Full Storeys

2 Storeys

1 3/4 Storeys

2 Storeys

Baths

2.5

1.5

Fire Places

Air Conditioning

Heating Type

Forced Air

Building Total Area (SF)

3,724

3,896

2,879

3,137

Basement Area (SF)

750

1,552

1,316

1,919

Finished Basement Area (SF)

440

Secondary Structure(s)

Structure Description

(115) Summer Kitchen

(108) Outdoor Pool

Year Built

1823

1994

1980

Building Total Area (SF)

1836

512

Quality of Construction

Structure Description

(108) Outdoor Pool

(116) Attached Garage

Year Built

1980

1990

Building Total Area (SF)

648

550

Quality of Construction

Farm Structure(s)

Structure Description

(203) Type Iii Uninsulated

Year Built

1920

1940

Building Total Area (SF)

996

1666

Quality of Construction

Height

Structure Description

(275) Miscellaneous Shed

Year Built

1930

Building Total Area (SF)

260

Quality of Construction

Height

Structure Description

(203) Type Iii Uninsulated

Year Built

1930

Building Total Area (SF)

864

Quality of Construction

Height

Structure Description

(202) Type Ii Barn

Year Built

1940

Building Total Area (SF)

1211

Quality of Construction

Height

Structure Description

(203) Type Iii Uninsulated

Year Built

1900

Building Total Area (SF)

660

Quality of Construction

Height

Farm Land

Farm Lands Class 1 Area

Farm Lands Class 2 Area

20.44

Farm Lands Class 3 Area

16.93

Farm Lands Class 4 Area

Farm Lands Class 5 Area

Farm Lands Class 6 Area

Farm land adj

$3,854

21.07

$81,204

17.56

$67,676

-62

-$148,242

Res land adj

$2,124

70.75

$150,273

70.75

$150,273

71.75

$152,397

Sale price

$410,000

$392,531

$635,500

Adjusted sale price

$641,477

$610,480

$639,655

Subject Property Property #4 Property #5 Property #6 Property #7

Roll Number

020900700308600

020900700116200

020900800206000

020900600305405

020901000112500

Address

1097 CASSBURN RD

1504 RITCHANCE RD

8 JOHN ST

1224 GREENLANE RD W

140 HIGH ST

Neighbourhood

F012 - 170

J07 - 302

P79 - 211

E01 - 302

P73 - 211

Property Code & Desc.

(261) Land Owned By A

(301) Single-Family

Valuation

Current Value Assessment

$642,000

$246,000

$300,000

$421,000

$422,000

Sale

Sale Date

07/27/2017

08/25/2014

09/28/2017

05/30/2014

Sale Amount

$360,000

$400,000

$439,000

$397,000

ASR

0.68

0.75

0.96

1.06

Site

Actual Site Area (Acres)

109.75

3.5

6.67

0.46

Residential Structure

Structure Code & Desc.

(301) Single Family

Year Built

1823

1898

1900

1924

1888

Effective Year Built

1937

1941

1935

1952

1967

Structure Condition Code

Average

Quality of Construction

7.5

6.5

Full Storeys

2 Storeys

1 3/4 Storeys

1 1/2 Storeys

2 Storeys

Baths

1.5

2.5

Fire Places

Air Conditioning

Heating Type

Forced Air

Building Total Area (SF)

3,724

2,841

3,849

3,227

3,938

Basement Area (SF)

750

1,313

856

1,874

1,207

Finished Basement Area (SF)

735

Secondary Structure(s)

Structure Description (115) Summer Kitchen (102) Shed (108) Outdoor Pool (101) Detached Garage (101) Detached Garage

Year Built

1823

1900

2012

1986

1888

Building Total Area (SF)

1836

684

392

576

589

Quality of Construction

Structure Description (108) Outdoor Pool (101) Detached Garage (101) Detached Garage (109) Tennis Court (116) Attached Garage

Year Built

1980

1950

1900

1986

1888

Building Total Area (SF)

648

440

467

7200

528

Quality of Construction

Structure Description (109) Tennis Court (108) Outdoor Pool

Year Built

1970

2011

Building Total Area (SF)

7200

800

Quality of Construction

Structure Description (101) Detached Garage

Year Built

1900

Building Total Area (SF)

1402

Quality of Construction

Farm Structure(s)

Structure Description (203) Type Iii Uninsulated (202) Type Ii Barn

Year Built

1920

1888

Building Total Area (SF)

996

686

Quality of Construction

Height

Farm Land

Farm Lands Class 1 Area

Farm Lands Class 2 Area

Farm Lands Class 3 Area

Farm Lands Class 4 Area

Farm Lands Class 5 Area

Farm Lands Class 6 Area

Sale price

$360,000

$400,000

$439,000

$397,000

Median land value

$39,250

(based on 0-3 ac)

subject calculated res land value

$152,397

based on $2124/ac x 71.75 acs)

calculated res land adj

$113,147

Adjusted residential value

$473,147

$513,147

$552,147

$510,147

Adjust for farm land

subject calculated farm land value

$3854/ac x 38 acs

$146,452

Total adjusted value

$619,599

$659,599

$698,599

$656,599

34MPAC’s witness excluded sales 2 and 4 which she considered inferior to the subject property. Based on the median adjusted sale prices of properties 1, 3, 5, 6 and 7 she estimated the current value of the subject property to be $656,000.

35In reconciling the two different approaches to value, she judged that the Direct Comparison approach was the better approach as it provided sufficient sales evidence of similar properties to value the subject property. Her final opinion of value was $656,000.

36As she was not seeking an increase in assessment over her corrected reconsideration offer of $633,000, she proposed an allocation of current value into the following classifications for assessment purposes:

Improvements (Residential) RU RT $386,000

Land (Residential) RU RT $112,000

Land (Farm) FL FT $135,000

TOTAL $633,000

37With respect to the value of the property subjected to noise from the steel mill MPAC submitted that the Appellant had provided no valuation evidence to demonstrate the impact of the noise and further submitted that in an agricultural area a noise nuisance was unlikely to affect value.

Equity Analysis

38MPAC’s witness also prepared an equity analysis. For her analysis she identified 30 sales of farm properties within 20 miles of the subject property which sold between January 1, 2014 and December 31, 2017. The Board notes that these were all farm properties and did not include rural residential properties as were used in the direct comparison approach in the valuation report.

39MPAC’s witness’ equity analysis shows a Level of Appraisal of 1.025. The Level of Appraisal is the overall or typical ratio of Assessment to Sale Prices at which a group of properties, which sold in the time period, have been assessed. It is the median of the of the ranked Assessment to Sale Ratios (“ASR”) of all the properties in the study. The median is a measure of central tendency. The median or midpoint is a fair way of determining overall equity as it excludes outlying ASRs.

40The International Association of Assessing Officers (“IAAO”) standards considers a LoA of between 0.90 and 1.10 to be fair. For the purposes of s. 44 equity, MPAC takes the position that equity is achieved if the median ASR falls between 0.95 and 1.05. MPAC’s witness concluded that in light of her finding of a LoA of 1.025 there was no need for an equity adjustment.

APPELLANT’S CASE

41The Appellant presented no evidence of sale prices of comparable properties at or near the valuation day. He stated that the sales of comparable properties were rare “and in all fairness, the assessed values should be used to find a reasonable and fair assessment…”. He presented six properties with their assessments and adjusted these assessments to reflect their differences. The adjusted assessments were between $299,656 and $511,829. The median value of these adjusted assessments was $408,858 rounded to $409,000. He submits this should be the assessment of the subject property.

42With respect to MPAC’s valuation of the structures, the Appellant indicated that the summer kitchen portion of the home is undergoing extensive renovations. He stated however that he was satisfied with the “unfinished allowance” with respect to renovations that were underway.

43He submitted that he should receive additional consideration for the poor state of the roof and soffits of the residence but had no estimate of the cost of repair or replacement to permit consideration of this argument.

44The Appellant’s evidence with respect to non-farmed land is that a total of six acres are swamp land of no value. He also states that 8.96 acres of the 38 farmed acres are subject to restricted farming as the land may not be fertilized or have pesticides applied as it would imperil the water supply of the house well. He stated that as a result, the land may only be used for hay. He states that there is a further parcel of 2.25 acres subject to the same restriction and stays wet, limiting crop yield.

45He stated that the noise caused by the operation of the steel plant was excessive and would affect the marketability of his property but presented no evidence that the noise his property was subjected to was different from that of his neighbours, some of whom were closer to the steel plant or any valuation evidence demonstrating that the noise affected the value of his property.

ANALYSIS

46For the purposes of this analysis it is important to bear in mind that MPAC accepts that the subject property, the entire 109.75 acres, is farm land for which s. 19(5) of the Act prescribes a distinct valuation regime.

47In MPAC’s witness’s report she states:

“The current use of the subject property is land used for farming purposes. As a result Section 19(5) of the Assessment Act directs me only to consider the current use of the subject property for my analysis. If there is a higher or better use other than farming purposes, I have neither considered it in my analysis nor reflected it in my opinion of current value.”

48Section 19(5) provides a distinct regime for the valuation of farm lands. The principal features of that regime are that “consideration shall be given to the current value of the lands and buildings for farm purposes only”, (s.19(5)(a)) and that “consideration shall not be given to sales of lands and buildings to persons whose principal occupation is other than farming;” (s.19(5)(b)).

49While recognizing the application of s.19(5)(a) to the subject property, the report of MPAC’s witness does not fully follow the mandatory valuation method required by s.19(5)(b) of the Act in either her use of the Cost Approach or the Direct Comparison approach to valuing the subject property.

50In the Cost approach section dealing with the valuation of the non-farmed land, MPAC’s witness used the sale of five properties. No evidence was presented to the Board that the first four sales were to persons whose principal occupation was farming.

51Section 40(17) places the onus of proving the correctness of current value upon MPAC. Accordingly, when MPAC determines the subject property to be farm land to which s.19(5) applies it has the onus of demonstrating that its evidence complies with the section.

52Compliance with s. 19(5)(b) requires some evidence that sales were to persons whose principal occupation was farming. Without evidence of the principal occupation of the purchaser of the land used as a comparable sale, the Board could be considering sales in violation of s. 19(5)(b) and ascribing to farm lands or portions thereof, values derived from purchases for speculative or purposes other than farming in violation of the policy objectives of the distinct valuation regime for farm lands.

53The result of this is that the first four sales may not be considered. The fifth sale was “vacant residential land not on water bought for farmland.” (emphasis added). In the absence of other evidence, and as MPAC specifically identifies this property as having been bought for farmland, the Board draws the reasonable inference that this sale was to a person whose principal occupation was farming.

54Sale 5 of the non-farmed land was for $100,000 for 90 acres of land. This produced an average price of $1,111 per acre. Applying this average price to the 71.75 acres of non-farmed produces a value of $79,714, instead of $152,397.

Effect of Swamp Land on the Non-Farmed Land

55The Appellant submitted no evidence of value of the six acres of swamp land on the 71.25 acres of non-farmed portion of the land. Nor was there any evidence in MPAC’s report that would assist in placing a value on this area. There is therefore no evidentiary basis to reduce the value of the non-farmed land for this condition.

Effect of Soil Restrictions of Farmed Land

56The Appellant claims 8.96 of the 38 acres of farmed land is restricted to hay because of pesticide or fertilizer restriction or too wet. This was not contested by MPAC.

57A summary description of soil classes taken from the Ontario Ministry of Agriculture, Food and Rural Affairs (OMFRA) is as follows:

The system classifies mineral soils into seven groups according to their potentials and limitations. The first three classes are considered capable of sustained production of cultivated field crops and are considered prime agricultural land resources. The fourth class is marginal for cultivated field crops. The fifth is capable of hay production and permanent pasture use. The sixth is capable of sustaining unimproved pasture only, and the seventh class has no agricultural capability. http://www.omafra.gov.on.ca/english/landuse/classify.htm

58The Board finds that because of the above restrictions these 8.96 acres are more likely classified as Class 4 or 5 soil.

59The Appellant submitted no evidence of the diminished value of this land. However, the evidence of MPAC of farmed land value is of assistance. Sale #1 of MPAC’s sales of farmed land contained 50 acres of Class 4 soil and 46.21 acres of Class 5 soil. This sale is the most similar to the 8.96 acres of the impaired farmed land of the subject property. The price per acre of Sale 1 of farmed land was $2,391 per acre. The Board finds this to be the per acre value of the impaired 8.96 acres of the restricted use farmed land.

60The value of the farmed land would be $111,920 for 29.04 acres of Class 3 soil at $3,854 per acre and $21,423.36 for 8.96 acres of Class 4 or 5 soil at $2,391 per acre. The total value of the farmed land is therefore $133,343, instead of the $146,452 value advanced by MPAC.

61On this analysis the revised Cost approach would yield an indication of value of $590,509. This is composed of $377,452 for the structures, $79,714 for the 71.75 non-farmed acres and $133,343 for the farmed 38 acres.

Direct Comparison Approach

62In the direct comparison approach section of her report, MPAC’s witness included four non-farm properties as comparable sales. These were rural residential properties with a land area of 0.46 to 6.67 acres. She included these non-farm properties “Because of the characteristics of the subject property, it is possible that it could sell as either a farm property or a rural residential property.”

63There is no evidence that these are sales to persons whose principal occupation is farming. The use of these sales as comparables is contrary to s. 19(5)(b) of the Act. This was also finding in the Board’s decision in Ayotte v Municipal Property Assessment Corporation, (ON ARB) 2019 CanLII 396225 (ON ARB) at paragraph 35 to 37 where a similar argument was advanced by MPAC.

64Because of the above analysis of the value of the non-farmed land, an adjustment value of $1,111 will have to be used for Sales 1 to 3. Using this adjustment value on the first three sales would produce a corrected grid analysis as follows:

Subject Property

Property #1

Property #2

Property #3

Roll Number

020900700308600

020900600508725

020900600508800

020900600702200

Address

1097 CASSBURN RD

1402 BORRIS RD

2850 CASSBURN RD

1350 ABERDEEN RD W

Neighbourhood

F012 - 170

F016 - 170

Property Code & Desc.

(261) Land Owned By A

(211) Farm With

Valuation

Current Value Assessment

$642,000

$487,000

$291,000

$527,000

Sale

Sale Date

05/23/2014

10/20/2017

11/20/2015

Sale Amount

$410,000

$392,531

$635,500

ASR

1.19

0.74

0.83

Site

Actual Site Area (Acres)

109.75

17.93

21.44

100

Residential Structure

Structure Code & Desc.

(301) Single Family

Year Built

1823

1990

1910

1900

Effective Year Built

1937

1990

1918

1935

Structure Condition Code

Average

Quality of Construction

7.5

6.5

Full Storeys

2 Storeys

1 3/4 Storeys

2 Storeys

Baths

2.5

1.5

Fire Places

Air Conditioning

Heating Type

Forced Air

Building Total Area (SF)

3,724

3,896

2,879

3,137

Basement Area (SF)

750

1,552

1,316

1,919

Finished Basement Area (SF)

440

Secondary Structure(s)

Structure Description

(115) Summer Kitchen

(108) Outdoor Pool

Year Built

1823

1994

1980

Building Total Area (SF)

1836

512

Quality of Construction

Structure Description

(108) Outdoor Pool

(116) Attached Garage

Year Built

1980

1990

Building Total Area (SF)

648

550

Quality of Construction

Farm Structure(s)

Structure Description

(203) Type Iii Uninsulated

Year Built

1920

1940

Building Total Area (SF)

996

1666

Quality of Construction

Height

Structure Description

(275) Miscellaneous Shed

Year Built

1930

Building Total Area (SF)

260

Quality of Construction

Height

Structure Description

(203) Type Iii Uninsulated

Year Built

1930

Building Total Area (SF)

864

Quality of Construction

Height

Structure Description

(202) Type Ii Barn

Year Built

1940

Building Total Area (SF)

1211

Quality of Construction

Height

Structure Description

(203) Type Iii Uninsulated

Year Built

1900

Building Total Area (SF)

660

Quality of Construction

Height

Farm Land

Farm Lands Class 1 Area

Farm Lands Class 2 Area

20.44

Farm Lands Class 3 Area

16.93

Farm Lands Class 4 Area

Farm Lands Class 5 Area

Farm Lands Class 6 Area

Farm land adj

$3,509

21.07

$73,935

17.56

$61,618

-62

-$217,558

Res land adj

$1,111

70.75

$78,603

70.75

$78,603

71.75

$79,714

Sale price

$410,000

$392,531

$635,500

Adjusted sale price

$562,538

$532,752

$497,656

65As MPAC’s witness had considered sales of properties 1 and 3 to be most comparable, the average of those two sales would be $530,097.

66The Appellant’s evidence of current value derived from the assessments of comparable properties is of little assistance. It presumes that the assessments of these properties are correct. The Appellant’s appeal, his objection to the correctness of his assessment as well as the Board’s analysis of the assessment of the subject property demonstrates that assessments are not always correct. The manner of determining current value is generally by use of either the cost approach, the direct comparison approach or the income approach. The cost approach and the direct comparison approach were available and applied in this case.

Effect of Noise on Value

67No evidence of loss of value from industrial noise was presented by the appellant. In the absence of such evidence the Board has no basis to reduce the what would otherwise be the current value. See Clark v Municipal Property Assessment Corporation, Region 09, 2018 CanLII 67788 (ON ARB) par. 23.

CURRENT VALUE

68The exclusion of sales prohibited by s.19(5)(b) would produce a cost approach indication of value of $590,509 and a direct comparison approach indication of value of $530,097. The average of the two approaches is $560,300 (rounded)

69MPAC’s witness had considered the direct comparison approach to be a better reconciled value based on seven sales of similar properties. The Board has used only two valid sales in its revised direct comparison approach. This is a very small sample of sales. In this circumstance it is reasonable to use the average of the two approaches to produce a reconciled current value.

70The Board finds that the correct current value of the property for the 2018 and 2019 tax year is $560,300 (rounded).

BOARD’S FINDING ON EQUITY

71During the hearing, MPAC’s witness had testified that part of the reason the assessment of the property had increased so significantly from the previous valuation date of 2012 was the large increase in the price of farm land which in some cases has doubled.

72The equity study spans four years from January 1, 2014 to December 31, 2017. The large increase in the price of farm land would, on her evidence, have occurred between 2012 and 2016. In considering the equity report in light of her evidence of rapidly increasing prices the Board is of the view that the Board’s usual practice of considering only sales within one year of the legislated valuation day of January 1, 2016 should apply to the equity study.

73The retained 2015 and 2016 sales are numbered 1, 5, 6, 7, 8, 11, 12, 17, 23, 24, 25, 26 and 27 in the equity report. The median ASR of these sales is 0.894. As this is less than the 0.95 minimum median ratio acceptable to MPAC, an equity reduction is in order. Applying the ratio of 0.894 to the correct current value of $560,300 will produce an equitable assessment of $500,908, rounded to $501,000.

74As the Board had found the current value of the farmed land ($133,343) to be 22.58% of the total value ($590,509) using the cost approach, this proportion shall be used to allocate the assessment to the farm property class, with the balance to the residential property class.

CONCLUSION

75The Board reduces the assessment from $769,000 to $501,000 for the 2018 taxation year and reduces the assessment from $642,000 to $501,000 for the 2019 taxation year, allocated as follows:

Land and Improvements (Residential) RU RT $387,900

Land (Farm) FL FT $113,100

TOTAL $501,000

“Pierre R. Lavigne”

PIERRE R. LAVIGNE

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

Jean-Luc Brisson and Sylvie Brisson v. Municipal Property Assessment Corporation, 2019 CanLII 96144

Case Summary

REASONS FOR DECISION

Relevant Legislation

ISSUES

DISCUSSION, ANALYSIS FOR CURRENT VALUE

MPAC’s Case

The Cost Approach

Value of Buildings

Value of Non-Farmed Land

Value of Farmed Land

Direct Comparison Approach

Equity Analysis

APPELLANT’S CASE

ANALYSIS

Effect of Swamp Land on the Non-Farmed Land

Effect of Soil Restrictions of Farmed Land

Direct Comparison Approach

Effect of Noise on Value

CURRENT VALUE

BOARD’S FINDING ON EQUITY

CONCLUSION