Thomas Green v. Municipal Property Assessment Corporation Region 09 and City of Toronto, 2020 CanLII 103259

Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE:

December 16, 2020

FILE NO.:

WR 167095

Assessed Person(s):

Thomas Green

Appellant(s):

Thomas Green

Respondent(s):

Municipal Property Assessment Corporation Region 09

Respondent(s):

City of Toronto

Property Location(s):

21 Langmuir Crescent

Municipality(ies):

City of Toronto

Roll Number(s):

1914-081-300-01100-0000

Appeal Number(s):

3339699, 3339700, 3353664 and 3398966

Taxation Year(s):

2017, 2018, 2019 and 2020

Hearing Event No.:

735574

Legislative Authority:

Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties

Representative

Thomas Green

Jashen So

Municipal Property Assessment Corporation

Erin Comeau

City of Toronto

No one appeared

HEARD:

October 27, 2020 by telephone conference call

ADJUDICATOR(S):

Jennifer Griffith, Member

DECISION

OVERVIEW

1Thomas Green (the “Appellant”) is the owner of 21 Langmuir Crescent (the “Subject Property”) in the City of Toronto (the “City”) and was represented by Jashen So at the hearing. The Subject Property was purchased in 2016, was torn down and re-built in 2017.

2Originally, the Municipal Property Assessment Corporation (“MPAC”) has returned the assessment of $1,401,000 based on the structure that existed in 2016. After learning that the original structure was torn down and re-built in 2017, MPAC has returned assessments pursuant to s. 33 of the Assessment Act for the 2017 and 2018 taxation years; and returned assessments pursuant to s. 40 for the 2019 and 2020 taxation years as stated below.

3Pursuant to s. 19(1) of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”), the assessment of land shall be based on its current value; and s.19.2(1)(4) provides that, for the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016.

4Pursuant to s. 33(1)(1) Change re land omitted from tax roll – The following rules apply if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted, the assessment corporation shall make any assessment necessary to correct the omission.

5MPAC has assessed the Subject Property at $3,158,000 for the 2017 taxation year ($1,401,000 original returned s. 40 assessment + $1,757,000 s. 33 omitted assessment effective November 20, 2017); at $3,158,000 for the 2018 taxation year ($1,401,000 original returned s. 40 assessment + $1,757,000 s. 33 omitted assessment effective January 1, 2018); and at $2,814,000 (s. 40) for the 2019 and 2020 taxation years.

6The Appellant filed appeals for the omitted assessment of $1,757,000 effective November 30, 2017; omitted assessment of $1,757,000 effective January 1, 2018; and returned assessment of $2,814,000 for the 2019 and 2020 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 33 and s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).

7It is the Appellant’s position that MPAC’s current value assessment is too high and that the correct current value should be in the range of $2,500,000 and $2,600,000. MPAC takes the position that the correct current value based on the most comparable properties should be $2,755,000.

8Pursuant to s. 44(3)(b) of the Act, MPAC takes the position that an equitable reduction of the current value is not required. The Appellant asserts that equity is not at issue. As the onus to demonstrate the correctness of equity rests with the Appellant, the Board accepts the Appellant’s assertion that equity is not at issue.

9Pursuant to s. 40(11) of the Act, the Municipality is a party to this proceeding; however, no one appeared on behalf of the City.

Issues for the Hearing

10At issue in this proceeding is:

1. A determination of the current value of the Subject Property for the 2017, 2018, 2019 and 2020 taxation years:

a. Direct Comparison Approach based on sales;

b. A determination of the correct omitted assessment for the 2017 and 2018 taxation years.

Result

11The Board finds the correct current value of the Subject Property is $2,691,000 as of the valuation date January 1, 2016, which is applicable to the 2017, 2018, 2019 and 2020 taxation years for the reasons set out below.

12Pursuant to s. 44(3)(b) of the Act, a further reduction is not required.

13Based on the correct current value of $2,691,000, the Board finds the correct s. 33 omitted assessment for the 2017 taxation year is $1,290,000 effective November 30, 2017 (correct current value of $2,691,000 - $1,401,000 original s. 40 returned assessment); and the correct s. 33 omitted assessment for the 2018 taxation year is $1,290,000 (correct current value of $2,691,000 - $1,401,000 original s.40 returned assessment).

14Therefore, the Board reduces the:

1. s. 33 omitted assessment from $1,757,000 to $1,290,000 effective November 30, 2017 taxation year;

2. s. 33 omitted assessment from $1,757,000 to $1,290,000 effective January 1, 2018 taxation year; and

3. s. 40 assessment from $2,814,000 to $2,691,000 for the 2019 and 2020 taxation years.

ANALYSIS

Description of Subject Property

15The Subject Property is a two-storey residential dwelling. The Property Code is 301 single-family detached (not on water), with an effective site area of 5,400 square feet (“sq. ft.”), a total building area of 3,562 sq. ft., a quality of construction rating of 8 and built in 2017.

Issue 1 - A determination of the current value of the Subject Property for the 2019 and 2020 taxation years

Direct Comparison Approach Based on Sales

16In determining the correct current value, the Board references s. 19(1) of the Act, which states that the assessment of land shall be based on its current value, which is defined 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”. The valuation date for the 2017 to 2020 taxation years is January 1, 2016.

17Reviewing the following evidence presented in support of current value, the Board finds the best evidence are four sales presented by MPAC (two of which are also presented by the Appellant) which were sold in 2016. These sale at 117 Baby Point Road; 83 Humbercrescent Boulevard (adjusted by 5% to account for light traffic to make it the same as Subject Property); 56 King George’s Road; and 7 Harcroft Road have a median sale price of $755.57 per sq. ft. of total building area. This value when applied to the Subject Property results in a correct current value of $2,691,000 ($755.57 x 3,562 sq. ft. of total building areas). The Board finds the time-adjusted sale price of $2,691,000 represents the best evidence of arm’s length transaction between a willing buyer and a willing seller pursuant to s. 19(1).

MPAC’s Proposed Comparable Properties

18Erin Comeau, a representative for MPAC, presents a Valuation Report dated February 28, 2019, which he prepared and testifies to the information it contains. MPAC testifies the Subject Property was sold in July 2015 for $1,150,000, was a two- storey structure with 1,591 sq. ft., was torn down and rebuilt in 2017 with 3,562 sq. ft.

19MPAC testifies that the returned assessment as of the valuation date January 1, 2016, is $1,401,000 for the Subject Property. MPAC testifies that the Subject Property was inspected on September 26, 2018 and the building measurements and other data on the Subject Property were verified and are current and complete.

20In support of current value, MPAC presents the following seven proposed comparable properties, which sold in 2015 and 2016. MPAC testifies that due to limited sales in the immediate neighbourhood of the Subject Property, it was forced to expend the search for similar properties in other neighbourhood areas that are similar (with rivers and parks) to the Subject Property. MPAC provides both the actual and time-adjusted sale prices; however, MPAC relies on the time-adjusted sale prices in its analysis, utilizing the Direct Comparison Approach to value. The following table is the analysis of the seven suggested comparable properties:

SALES ANALYSIS

7 SUGGESTED COMPARABLE PROPERTIES

FRONTAGE (ft.)

LOT SIZE (sq. ft.)

TOTAL BUILDING AREA (sq. ft.)

QUALITY OF CONSTRUCTION

YEAR BUILT

SALE DATE

SALE PRICE (time-adjusted)

SALE PRICE (per sq.ft.)

83 Humbercrescent Boulevard

41

7,480

2604

7.5

2016

2016

$1,856,418

$712.91

2 Dacre Crescent

55

5,885

4,004

8.5

2014

2015

$3,464,573

$865.27

16 Wendigo Way

50

6,050

2,753

8.5

1920

2016

$2,684,700

$975.19

65 Brule Gardens

44.5

8,633

3,439

9

2016

2016

$2,933,188

$852.91

117 Baby Point Road

51

6,273

3,146

8

2007

2016

$2,307,112

$733.34

56 King George’s Road

50

6,300

3,341

8

2016

2016

$2,584,482

$773.56

7 Harcroft Road

50

6,250

3,518

8

2006

2016

$2,682,794

$762.59

Median

50

6,273

3,341

8

2014

2016

$2,682,794

$773.56

Subject Property

45

5,400

3.562

8

2017

NIL

n/a

n/a

21Based on the above analysis MPAC believes that the best estimate of current value is $2,755,000 which is the median sale price of ($773.56 x 3,562 sq. ft. of total building area of the Subject Property). MPAC argues that the time-adjusted sale prices range from $1,856,000 to $3,464,000 and by bracketing the sales the estimated current value of $2,755,000 is fair and falls with that range.

Appellant’s Proposed Comparable Property

22In support of current value, Katelyn Campbell was called as a witness and she presents three proposed comparable property (two of which are also presented by MPAC) which sold in the same homogeneous neighbourhood as the Subject Property. The Appellant presents both actual sale prices and time-adjusted sale prices (based on 1% per month). The Appellant presents no analysis to show how it arrived at the time-adjustment factor of 1%. However, the Appellant states that it has no issues with MPAC’s time-adjusted sales values. The following is an analysis of the three sales:

Appellant’s Sales Analysis

3 PROPOSED COMPARABLE PROPERTIES

FRONTAGE (ft.)

LOT SIZE (“sq. ft.”)

TOTAL BUILDING AREA (“sq. ft.”)

YEAR BUILT

SALE PRICE

SALE DATE

SALE PRICE (time-adjusted)

TAS SALE PER sq. ft. (building area)

19 Methuen Avenue

25

2,500

2,743

2015

$1,875,000

2016

$1,800,412

$656.36

117 Baby Point Road

51

6,273

3,146

2007

$2,450,000

2016

$2,327,568

$739.84

83 Humbercrescent Boulevard

40

7,480

2604

2016

$1,950,489

2016

$1,872,898

$719.23

Subject Property

45

5,400

3,562

2017

n/a

n/a

23Based on the above sale analysis, the Appellant takes the position that the correct current value should be in the range of $2,500,000 and $2,600,000, based on the two most comparable properties at 117 Baby Point Road and 83 Humbercrescent Boulevard located in the same neighbourhood as the Subject Property.

24The Appellant argues that MPAC’s comparable property at 65 Brule Gardens which sold at a time-adjusted sale price of $2,933,188 is not comparable to the Subject Property, because it has a higher quality rating of 9, a significantly larger lot size of 8,633 sq. ft., with larger finished basement of 1,390 sq. ft., and from a different homogeneous area (E01) than the Subject Property. The Subject Property has a quality rating of 8, a lot size of 5,400 sq. ft., and finished basement of 1,202 sq. ft. and from homogeneous area (D16).

Findings on Current Value

25Reviewing the evidence presented in support of current value, the Board finds the best evidence are four sales presented by MPAC (two of which are presented by the Appellant) with characteristics (total building area, lot size, quality of construction and year built) most similar to the Subject Property. These four sale at 117 Baby Point Road; 83 Humbercrescent Boulevard (adjusted by 5% to account for light traffic to make it the same as Subject Property); 56 King George’s Road; and 7 Harcroft Road have a median quality of construction rating of 8, total building area 3,243 sq. ft., lot size of 6286 sq. ft., built in 2011, is located within 1.2 kilometres and sold at a median sale price of $755.57 per sq. ft. of total building area. This value when applied to the Subject Property results in a correct current value of $2,691,000 ($755.57 x 3,562 sq. ft. of total building areas). The Board finds the time-adjusted sale price of $2,691,000 represents the best evidence of arm’s length transaction between a willing buyer and a willing seller pursuant to s. 19(1).

26Regarding the remaining one sale by the Appellant at 19 Methuen Avenue, the Board did not rely on this sale because it is significantly smaller in lot size and in total building area than the Subject Property.

27Regarding the remaining three sales by MPAC at 2 Dacre Crescent; 16 Wendigo Way; and 65 Brule Gardens, the Board did not rely on these sales, because two of the proposed comparable properties are significantly larger in lot sizes, larger in total building area, and with higher quality rating; and the third comparable property was built in 1920 and had major renovation in 2008 (renovation code D). Renovation D means that the proposed comparable property was gutted and rebuilt, with a smaller size total building area than the Subject Property.

CONCLUSION

28The Board finds the correct current value for the Subject Property is $2,691,000 for the 2017, 2018, 2019 and 2020 taxation years.

29The Board also finds that equity pursuant to s. 44(3)(b) is not at issue and no further reduction is required.

A determination of the correct omitted assessment for the 2017 and 2018 taxation years

30Based on the correct current value of $2,691,000, the Board finds the correct s. 33 omitted assessment for the 2017 taxation year is $1,290,000 effective November 30, 2017 (correct current value of $2,691,000 - $1,401,000 original s. 40 returned assessment); and the correct s. 33 omitted assessment for the 2018 taxation year is $1,290,000 effective January 1, 2018 (correct current value of $2,691,000 - $1,401,000 original s.40 returned assessment.

ORDER

31The Board orders the reduction of the returned assessments for the:

1. Section 33 omitted assessment from $1,757,000 to $1,290,000 effective November 30, 2017 taxation year;

2. Section 33 omitted assessment from $1,757,000 to $1,290,000 effective January 1, 2018 taxation year; and

3. Section 40 assessment from $2,814,000 to $2,691,000 for the 2019 and 2020 taxation years.