Beagan v. Municipal Property Assessment Corporation, 2019 CanLII 9710

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

February 05, 2019

FILE NO.:

WR 157694

Assessed Person(s):

Steven Kristopher Kenny; Lorraine Eveline Beagan

Appellant(s):

Lorraine Eveline Beagan

Respondent(s):

Municipal Property Assessment Corporation

Region 07

Respondent(s):

City of Kawartha Lakes

Property Location(s):

15 Cop’s Cove

Municipality(ies):

City of Kawartha Lakes

Roll Number(s):

1651-026-020-45300-0000

Appeal Number(s):

3235637 and 3292941

Taxation Year(s):

2017 and 2018

Hearing Event No.

704467

Legislative Authority:

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

Heard:

December 4, 2018 in Lindsay, Ontario

APPEARANCES:

Parties

Representative

Steven Kristopher Kenny and Lorraine Eveline Beagan

Self-represented

MPAC

William Jon White and Shawn O’Connor

City of Kawartha Lakes

Militia Andrews

DECISION OF THE BOARD DELIVERED BY JENNIFER GRIFFITH

BACKGROUND

1Steven Kristopher Kenny and Lorraine Eveline Beagan (the “Appellants”) are the owner of 15 Cop’s Cove (the “Subject Property”), which is located in the City of Kawartha Lakes.

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.

3MPAC has assessed the current value of the Subject Property at $480,000 for the 2017 taxation year and at $502,000 for the 2018 taxation year.

4The Appellants have filed an appeal for taxation year 2017 and were deemed to have filed an appeal for the 2018 taxation year with the Assessment Review Board (the “Board”), pursuant to s. 40(26) of the Act. It is their position that MPAC’s assessment of current value is too high and that the correct current value should be in the range of $420,000 to $450,000. At this hearing, MPAC takes the position that its assessed values should be confirmed at $480,000 for the 2017 taxation year; and $502,000 for the 2018 taxation year.

5Pursuant to s. 40(11) of the Act, the City of Kawartha Lakes, is a party to this proceeding. However, Ms. Andrews indicated that she was in attendance to only observe the proceedings.

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. MPAC takes the position that an equitable reduction is not required. The Appellants are of the view that an equity reduction is required and that an equitable value should be in the range of $400,000 to $420,000.

7At the completion of the hearing, the Board reserved its decision. For the reasons that follow, the Board finds the current value assessment for the 2017 and 2018 taxation years is $486,000. MPAC has not filed a notice of intension to seek a higher assessment, as required by Rule 40 of the Board’s Rules of Practice and Procedure, so the Board will not increase the assessment for the 2017 taxation year. Therefore, the Board confirms the returned assessment of $480,000 for the 2017 taxation year; and reduces the returned assessment from $502,000 to $486,000 for the 2018 taxation year. Pursuant to s. 44(3)(b) of the Act, an equitable reduction of this value is not required.

RELEVANT LEGISLATION

8Section 1 of the Act states:

1. “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.

9Section 19.(1) of the Act states:

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

10Section 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:

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

11Section 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.

12Section 44.(3) of the Act states:

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

(a) determine the current value of the land; and

(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.

ISSUES

13The issues to be determined on this appeal are:

1. The correct current value of the Subject Property for the taxation years 2017 and 2018.

2. Whether there should be an equitable reduction of the current value of the Subject Property pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be.

Description of the Subject Property

14The Subject Property is a, seasonal/recreational dwelling – first tier on water, located at 15 Cop’s Cove, in the City of Kawartha Lakes. The Subject Property was built in 2015, with a total building area of 1,407 square feet (“sq. ft.”), a frontage of 80 feet and a total lot size of 0.52 acre.

DISCUSSION, ANALYSIS AND FINDINGS

Issue No. 1: The correct current value of the Subject Property for the taxation years 2017 to 2018

MPAC’s Evidence

15William Jon White is the Advocate for MPAC and Shawn O’Connor is the Witness for MPAC. Mr. White called on Mr. O’Connor and he gave an overview of his related work experience in the area of assessments and that he holds an Institute of Municipal Assessors (“IMA”) designation. Mr. O’Connor states that he has worked in the area of property valuation for approximately 17 years, dealing with residential, farm, commercial, and industrial properties.

16Mr. O’Connor presents a Valuation Report, dated June 27, 2018 (“Valuation Report”) which he prepared and testifies to the information contained in the report.

17Mr. O’Connor states that the Subject Property was inspected on November 18, 2016 as a result of a Request for Reconsideration for the returned assessment for 2017 taxation year. He states that the inspection revealed amongst other minor changes that the Subject Property has a wooden deck with 1,427 sq. ft., an enclosed porch with 251 sq. ft., and a covered porch with 180 sq. ft. Whereas, an inspection of the Subject Property in 2015 revealed a wooden deck with 655 sq. ft. and a covered porch with 427 sq. ft.

18Based on the findings of the 2016 inspection of the Subject Property, MPAC made the necessary adjustments and returned an assessment of $502,000 for the 2018 taxation year, which is $22,000 more than the returned assessment of $480,000 for the 2017 taxation year.

19Mr. O’Connor testifies that the returned assessment for the Subject Property includes a negative 25% reduction for weedy shoreline; a negative 5% for ravine type 3; and a negative 5% for being in a flood plain area.

20Mr. O’Connor also testifies that the Subject Property had received a $10,000 reduction for proximity to a commercial property in the previous assessment cycle (valuation date January 1, 2012), and that the adjustment was removed, because there was no evidence of commercial activities at the cabin rentals and trailer park business abutting the Subject Property when he visited the property.

21In support of current value, Mr. O’Connor states that he relied on the Direct Comparison Approach to value and presents an analysis of the sales of six suggested comparable properties which occurred over the period 2012 to 2015. These six suggested comparable properties are located on Pigeon Lake, in the same homogeneous neighbourhood and within 0.89 kilometers of the Subject Property. The analysis contained both actual and time-adjusted sale prices.

22These six suggested comparable properties are located at 44 Falls Bay Road, sold in 2012 for $517,500 (time-adjusted sale price of $580,484); at 44 Falls Bay Road, sold in 2015 for $605,000 (time-adjusted sale price of $618,123); at 60 McGregor Drive, sold in 2014 for $552,000 (time-adjusted sale price of $578,138); at 40 Hills Road, sold in 2015 for $470,000 (time-adjusted sale price of $480,195); at 74 Falls Bay Road, sold in 2015 for $480,000 (time-adjusted sale price of $492,489); and at 3028 Pigeon Lake Road, sold in 2012 for $522,000 (time-adjusted sale price of $576,494).

23These six suggested comparable properties have on average a frontage of 115 feet; lot size of 0.54 acres; year built 1982; quality rating of 6.02; and total building area of 1,634 sq. ft. This is compared to the Subject Property with a frontage of 80 feet; total lot size 0.52 acres; built in 2015; quality rating of 6; a total area of 1,407 sq. ft.; assessed at an average of $348.96 per sq. ft. based on total building area ($341.15 per sq. ft. for the 2017 plus $356.78 per sq. ft. for the 2018 returned assessments and divide by 2).

24Based on this analysis, MPAC states that the median time-adjusted sale price is $363.76 per sq. ft. based on total building area. When this value is applied to the Subject Property it results in a value of $511,000 rounded ($363.76 x 1407 sq. ft. of total building area).

25In response to questions on cross-examination, Mr. O’Conner states that he also considered the Cost Approach to value, even though he was unsuccessful in obtaining information from the Appellants, as to the cost of building the new structure in 2015. Despite the lack of cost information, Mr. O’Connor estimates the cost to be approximately $508,388 (land value of $164,524 + Garage value of $43,864 + Municipal permit taken out to build the new structure with an estimated cost of $300,000).

MPAC’s Submissions

26Relying on its evidence, MPAC submits that the change in the returned assessment of $355,000 for the 2016 taxation year and the returned assessment of $480,000 for the 2017 taxation year is legislatively necessary. MPAC argues that the returned assessment for the 2016 taxation year is based on a different valuation cycle, with a valuation date of January 1, 2012. Whereas, the returned assessment for the 2017 taxation year is based on the current cycle with a valuation date of January 1, 2016.

27In regard to the returned assessment of $502,000 for the 2018 taxation year, MPAC argues that although the 2017 and 2018 returned assessments are within the same cycle and with the same valuation date of January 1, 2016, the returned assessment for the 2018 taxation year was higher than the 2017 returned assessment of $480,000. This is because of improvements to the Subject Property captured by the November 18, 2016 inspection. When the Subject Property’s data was updated to reflect the findings of the inspection it increased the value to $502,000.

28MPAC submits that the removal of the $10,000 negative adjustment for the cabin rentals and trailer park business abutting the Subject Property is not warranted because there was no evidence of commercial activities when he visited the property.

29MPAC also submits that the Gravel Pit and Kawartha Dairy commercial businesses do not qualify for negative adjustment for proximity to the Subject Property, because their location is outside the distance for proximity adjustment.

30MPAC submits that the impact of flooding, lot layout, and water levels on the Subject Property has been addressed with the negative adjustments of 25% reduction for weedy shoreline; a 5% reduction for ravine type 3; and a 5% reduction for being in a flood plain area, which are included in the returned assessment of the Subject Property.

31Based on the evidence, MPAC is of the opinion that the current value is $502,000.

32Finally, MPAC also cited the following cases to assist the Board in the determination of current value:

1. Pellarin v. Municipal Property Assessment Corp. Region No. 3, [2009] O.A.R.B.D. No. 97 (“Pellarin”);

2. Auerbach v. Municipal Property Assessment Corp. Region No. 3, [2010] O.A.R.B.D. No. 449 (“Auerbach”);

3. Feldman v. Municipal Property Assessment Corp. Region No. 9, [2011] (“Feldman”);

4. Devald et al. and Regional Assessment Commissioner, Region No. 16 et al., 1977 CanLII 1246 (ON CA), [1977] O.J. No. 2166 (ONCA) (“Devald”); and

5. Reininghaus v. Municipal Property Assessment Corporation, Region 15, [2013] O.A.R.B.D. No. 65, (“Reininghaus”);

Appellants’ Evidence

33The Appellants submits that they were provided no explanation and are not aware of any justification for increasing the assessments from:

i. $355,000 for the 2016 taxation year, to $480,000 for the 2017 taxation; and

ii. $480,000 for the 2017 taxation year, to the $502,000 for the 2018.

34The Appellants testify that the negative adjustments of 25% reduction for weedy shoreline; 5% reduction for ravine type 3; and 5% reduction for being in a flood plain area are inadequate and should be increased for the Subject Property.

35The Appellants testify that in a prior Board decision in June 2014, the Subject Property received the following negative adjustments;

a) A negative $10,000 adjustment for abutting a cabin rentals and trailer park business. That the owner of the business is the owner of the right-of-way that allows access to Cap’s Cove and that the zoning of the property is commercial;

b) A negative 17.4% adjustment for the lay-out of the lot, because of ground water and its location in a flood plain area; and

c) A 15% equity reduction (which the Appellants state they are not seeking).

36The Appellants argue that the negative adjustment of $10,000 for abutting commercial property was removed by MPAC, because MPAC claims that there was no evidence of commercial activities when they visited the property. The Appellants testify that the adjustment should be carried forward to the appeals at hand, because they are of the view that the business still operates. They claim that they know that the business continues to operate, because they are friends with the owner; that visitors from the United States are still coming to the area; and the property is zoned commercial.

37The Appellants also believe that the negative adjustment of $10,000 should be increased, because the numbers of commercial businesses in the neighbourhood have increased. They testify that the Subject Property is negatively impacted by nuisances associated with heavy trucks operated by a Gravel Pit business and Kawartha Dairy located within 1 kilometer of the Subject Property.

38The Appellants testify that the flooding and ground water level have increased leading to septic contamination and they provide photographs to show evidence of water levels, flooding, potholes, and the newly elevated location (6 – 8 feet mound) of the septic system.

39The Appellants testify that the portion of the cabin rentals and trailer park property directly behind the Subject Property is undeveloped and is a mixture of trees and wetland marsh. The Appellants state that the water levels and size of the wetland marsh increases between April and July, because of rising ground water, rain storms and the fact that the Subject Property is part of a flood plain. They argue that the impact of these adverse conditions limits the use of their entire property and negatively affect their enjoyment of the property.

40In support of current value, the Appellants present the sales of seven suggested comparable properties located in the wider vicinity of Bobcaygeon and Dunsford areas, and sold over the period 2011 to 2018. The Appellants presents MLS listings for a number of the above suggested properties with insufficient/questionable data about the sales date and other characteristics (property type, age, lot size, total building area, abutments, quality, access (seasonal/year round) etc.). They also provide sales information which they obtained from MPAC for a few of the suggested comparable properties regarding actual and time-adjusted sale prices.

41These seven suggested comparable properties are located at 60 Little Bob Drive, sold in 2016 for $459,900; at 493 Kennedy Drive, sold in 2016 for $389,000 (time-adjusted sale price of $371,600); at 51 Thomas Drive, sold in 2014 for $310,000 (time-adjusted sale price of $325,000); at 11 Lakeland Road, sold in 2011 for $289,000; at 862 Cedar Glen Road, sold in 2018 for $390,000; at 830 Cedar Glen Road, sold in 2016 for $410,000; and at 125 Pirates Glen Drive, sold in 2016 for $468,000.

42The sales of these seven suggested comparable properties ranged from $289,000 to $468,000 and reflect a median sale price of $390,000.

Appellant’s Submissions

43The Appellants argue that the $10,000 negative adjustment for abutting commercial property should be carried forward from the previous valuation cycle (valuation date January 1, 2012) to the appeals at hand (valuation date January 1, 2016); and that the amount of the negative adjustment should be increased, because of increased commercial business activities and associated nuisances in the neighbourhood.

44The Appellants argue that the negative adjustments (total of 35%) to address the impact of adverse conditions (increased water levels, flooding, lot layout, limited use and enjoyment) of the Subject Property are too low and should be increased.

45The Appellants argue that MPAC’s returned assessment of current value is too high and that the correct current value based on the seven sales presented should be in the range of $420,000 - $450,000.

46Finally, the Appellants cited Lomaga v. Municipal Property Assessment Corp. Region No. 9, [2010] O.A.R.B.D. No. 15 (“Lomaga”); and are also relying on the cases submitted by MPAC.

Findings on Current Value

47Under 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.

48In regard to MPAC’s decision to remove the $10,000 reduction for abutting commercial property, because no evidence of commercial activities was seen when MPAC visited the cabin rentals and trailer park property, the Appellants cited the Pellarin case. That case states “Adjustments made under Requests for Reconsideration will also be carried forward unless circumstances as noted by the Ombudsman prevent the carry forward”. The Board disagrees with Pellarin, because the Board’s statutory duty is to determine the likely sale value of the Subject Property, and not to be concerned with MPAC’s model. On the other hand, the Appellants present no factual evidence to show that the cabin rentals and trailer park property is conducting commercial business, except for their opinion that it is. Therefore, the Board gave no weight to the Appellants opinion.

49In regard to the the Appellants argument that MPAC provided no explanation and they are not aware of any justification for the increases in assessments from $355,000 for the 2016 taxation year to $480,000 for the 2017 taxation year, MPAC cited the Pellarin case which states

there is nothing in the Act requiring a correlation of CVA’s from one valuation day to the next as suggested by Mr. Pellarin in his Submissions. Market conditions may vary significantly from neighbourhood to neighbourhood and it is not unusual that that values increase by differing percentages from neighbourhood to neighbourhood.

In the case at hand, the Board agrees with that finding of the Pellarin case and accepts MPAC explanation that the assessment of $355,000 for the 2016 taxation year is based on a valuation date of January 1, 2012, and the assessment of $480,000 for the 2017 taxation year is based on a valuation date of January 1, 2016.

50In regard to the the Appellants argument that there is no justification for the increases in assessments from $480,000 for the 2017 taxation year to $502,000 for the 2018 taxation year; and that no explanation for the increase was provided prior to this hearing, the Board accepts MPAC’s explanation that the increase in assessment is based on the findings of an inspection of the Subject Property on November 18, 2016. MPAC then changed the assessed value for the 2018 taxation year. In regard to the issue of no explanation for the increase in assessment value, the Board finds that MPAC was in compliance with the Act as it pertains to this appeal and that there is no requirement to provide any explanation to the assessed person. The Act clearly states in s. 36 (1):

Time for annual assessment and return of roll Assessment

s. 36 (1) Except as provided in section 32, 33 or 34, assessments of land under this Act shall be made annually at any time between January 1 and the second Tuesday following December 1.

51In regard to the issues that the negative adjustments should be increased, because (a) commercial business activities and associated nuisances (noise from heavy trucks) have increased in the neighbourhood; and (b) water levels, flooding, potholes, weedy shoreline and contamination have increased and worsened, MPAC cited the Feldman case which states “The inner workings and policies in place at MPAC leading to various adjustment, will not assist a Member at the hearing to determine value. What would assist the Member is an alternative value supplied by the appellant, supported by his own evidence”. The Board agrees with the findings in the Feldman case and accepts MPAC’s evidence that the Gravel Pit and Kawartha Dairy companies are not located within close enough proximity to the Subject Property to warrant a negative adjustment. The Board also finds that the total adjustments of 35% reflects an increase over the previous assessment cycle (valuation date January 1, 2012) which was 17.4% for increased water levels, flooding, potholes and weedy shoreline. The Board finds that the Appellants present no official documents to confirm the presence of contamination and no official documents or receipts of the cost to cure the issue.

52In reviewing MPAC’s six sales of suggested comparable properties in support of current value, the Board does not rely on the three sales which occurred in 2012 and 2014. The Board finds that these three sales are too far removed from the valuation date of January 1, 2016 to provide any meaningful test of current value.

53An analysis of the remaining three sales located on the same lake as the Subject Property (Pigeon Lake) and on average 0.88 kilometres away. These three comparable properties are as follows when compared to the Subject Property, which is a seasonal/recreational dwelling with seasonal access, built in 2015, with frontage of 80 ft., lot size of 0.52 acre, mutual or shared driveway, total building 1,407 sq. ft., a detached garage and no basement:

1. 44 Falls Bay Road, sold in 2015 at a time-adjusted sale price of $618,123, is a single family home with year round access, effective year built is 2006 (9 years older), a frontage of 55 ft., lot size of 0.18 acre, quality rating 6.5, separate or private driveway, total building area 1,349 sq. ft., finished basement area of 1,193 sq. ft. (larger), and a detached garage. In reviewing the characteristics of this suggested comparable property, the Board finds that this property is superior in quality, liveable space (2,542 sq. ft.), and year round access. The Board finds that it is likely that the Subject Property would sell for less than $618,123;

2. 40 Hills Road, sold in 2015 at a time-adjusted sale price of $480,195, is a single family home with year round access, effect year built is 1969 (41 years older), a frontage of 111 ft., lot size of 0.44 acre, quality rating of 6.0, separate or private driveway, total building area 1,775 sq. ft. (368 sq. ft. larger), finished recreational area of 280 sq. ft., (larger) a detached garage and a carport. In reviewing the characteristics of this suggested comparable property, the Board finds that this property, while older, has been maintained and is the same quality rating as the Subject Property. Although this property is superior in liveable space (2022 sq. ft.), frontage, and year round access, the Subject Property is significantly newer and would likely sell around the same price as this comparable property; and

3. 74 Falls Bay Road, sold in 2015 at a time-adjusted sale price of $492,489, is a seasonal/recreational dwelling, with seasonal access, effective year built is 1969 (46 years older), a frontage of 245 ft. (larger), lot size of 0.37 acre, quality rating of 5.5, separate or private driveway, total building area 1,257 sq. ft., no finished basement, and a detached garage. In reviewing the characteristics of this suggested comparable property, the Board finds that this property, while older, is relatively similar to the Subject Property, except for the large frontage which can most likely compensate for the difference in age. The Board finds that the Subject Property would likely sell at or close to the sale price of $492,489.

54Based on the above analysis of the sale prices of these three suggested comparable properties, the Board finds the best evidence to be the comparable property at 40 Hills Road, which sold at a time-adjusted sale price of $480,195; and the comparable property at 74 Falls Bay Road, which sold at a time-adjusted sale price of $492,489. The average sale price of those two sales is $486,000 (rounded). Based on the analysis of these sales, the Board finds that MPAC has met its burden of proof demonstrating the correctness of current value.

55In reviewing the seven sales presented by the Appellants, the Board did not rely on the three sales which occurred in 2011, 2014, and 2018. The Board finds that these three sales are too far removed from the valuation date of January 1, 2016, to provide any meaningful test of current value.

56An analysis of the remaining four sales which occurred in 2016 in the wider vicinity of Bobcaygeon and Dunsford areas are located at 60 Little Bob Drive, sold in 2016 for $459,900; at 493 Kennedy Drive, sold in 2016 for $389,000 (time-adjusted sale price of $371,600); at 830 Cedar Glen Road, sold in 2016 for $410,000; and at 125 Pirates Glen Drive, sold in 2016 for $468,000. The analysis shows that the actual sale prices range from $389,000 to $468,000 and with a median sale price of $435,000.

57Based on the above sales analyses, the Board accepts MPAC’s two sales which occurred in 2015, in the same homogeneous neighbourhood, within close proximity to the Subject Property and sold at an average sale price of $486,000 (rounded).

58On the contrary, the Board did not rely on the Appellants’ four sale which occurred outside of the homogeneous neighbourhood of the Subject Property, because the Appellants present insufficient information (in some cases, total building area, lot size, age, quality of construction and time-adjustment sale price) that is necessary to make a true comparison to the Subject Property. The Board cannot determine if those properties are superior or inferior to the Subject Property, so they are not a good guide to value.

59Based on all of the above evidence, the Board finds the current value to be $486,000.

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) (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?

60MPAC presents an Equity Analysis Report in which the assessments of 22 comparable properties are compared to their respective sale prices to determine the Assessment to Sales ratio (“ASR”). The ASR is computed by dividing the assessed values of a property sold, by its sale price.

61MPAC states that these 22 comparable properties include Property Code 391 (seasonal/recreational dwelling on water) and Property Code 313 (single family detached on water), located within 2.37 kilometers in the same homogeneous neighbourhood as the Subject Property and sold over the period January 1, 2012 to November 17, 2017.

62The analysis of the sale of these 22 comparable properties shows a Level of Appraisal (“LOA”) of 0.95 and a Coefficient of Dispersion (“CoD”) of 9.47. Based on this finding, MPAC is of the opinion that an equity reduction is not required, because the findings fall within MPAC’s standards of 0.95 to 1.05 for the LOA and below 15 for the CoD.

63The Board conducted an equity analysis based on the ASRs of the above sales of the 22 comparable properties, and the result shows a Mean of 0.957 and a Confidence Interval of 0.0548 (5.5%). This means that the Board can be confident that the true mean LOA is between 90.2% and 101.2%. On that evidence the Board cannot confidently say that similar property in the vicinity is assessed, on average, below its current value.

64MPAC also presents a second equity analysis using only 17 of the above 22 sales which occurred over the period January 1, 2012 to December 31, 2015 (including the sales of suggested comparable properties presented by MPAC in support of current value).

65The analysis of these 17 comparable properties shows an LOA of 0.95 and a CoD of 8, which also falls within MPAC’s standards of 0.95 to 1.05 for the LOA and below 15 for the CoD. Based on this finding, MPAC is also of the opinion that an equity reduction is not required.

66The Board conducted an equity analysis based on the ASRs of the above sales of the 17 comparable properties, and the result shows a Mean of 0.958 and a Confidence interval of 0.053 (5.3%). This means that the true mean LOA is between 90.5% and 101.1%. That is not compelling evidence that similar property in the vicinity is assessed, on average, below its current value.

MPAC’s Submissions

67Relying on its evidence, MPAC submits that an equitable reduction of the current value for the 2017 to 2018 taxation years is not required. Therefore, MPAC argues that the returned assessment of $480,000 should be confirmed for the 2017 taxation year; and the returned assessment of $502,000 should be confirmed for the 2018 taxation year.

Appellants’ Evidence

68The Appellants present four suggested comparable properties in support of an equity reduction, because they are located very close to the Subject Property and share some of the same issues. Three of the suggested comparable properties are not sold and the Appellants present very limited information on the characteristics of these properties for comparison to the Subject Property. The fourth suggested comparable property at 60 Little Bob Drive was sold and analyzed for current value. Unfortunately, the Appellants did not provide the returned assessment for 60 Little Bob Drive. Therefore, this suggested comparable was not considered for Equity.

69Three suggested comparable properties are located at:

i. 21 Cop’s Cove, assessed at $367,000, with a total building area of 1054 sq. ft. reflects an assessment per sq. ft. of $341.15;

ii. 11 Cop’s Cove, assessed at 357,000, with a total building area of 1006 sq. ft. reflects an assessment per sq. ft. of $354.87; and

iii. 60 Macey Lane, assessed at $417,000, with a total building area of 1189 sq. ft. reflects an assessment per sq. ft. of $350.71.

70These three suggested comparable properties reflect an average assessed value of $351.25 per sq. ft. based on total building area. This is compared to the Subject Property with a slightly lower value of $348.96 per sq. ft. (assessed value of $341.15 per sq. ft. for 2017 taxation year + $356.78 for the 2018 taxation)/ 2).

Appellant’s Submissions

71The Appellants submit than an equitable value should be in the range of $400,000 and 420,000.

Findings on an Equitable Reduction

72The 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 paragraph 6:

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.

In addressing equity in assessment, the Court, at paragraph 35, also noted that “an assessment made at the actual value of lands and buildings … would be an inequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred”.

73However, the 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 Appellant to establish, on a balance of probabilities, that an equitable reduction is required.

74The term “vicinity” is not defined in the Act, but refers to the appropriate geographical area that will yield meaningful comparable properties (see Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (Ont. C.A.) at page 6).

75In reviewing the above equity analyses presented by MPAC based on the Median ASR, and also analyses based on the Mean ASR, the Board finds that the evidence does not support an equity reduction.

76In reviewing the equity analysis presented by the Appellants, the Board also finds that the evidence does not support an equity reduction, because the Subject Property is assessed similarly to the three suggested comparable properties.

DECISION

77The Board finds the current value of the Subject Property is $486,000 for the 2017 and 2018 taxation years. MPAC has not filed a notice of intension to seek a higher assessment, as required by Rule 40 of the Board’s Rules of Practice and Procedure, so the Board will not increase the assessment for the 2017 taxation year. Therefore, the Board confirms the returned assessment of $480,000 for the 2017 taxation year; and reduces the returned assessment from $502,000 to $486,000 for the 2018 taxation year.