Tribunals Ontario

Assessment Review Board

ISSUE DATE: December 24, 2020

FILE NO.: WR 167445

Assessed Person(s): Patrick Lehoux

Appellant(s): Patrick Lehoux

Respondent(s): Municipal Property Assessment Corporation Region 30

Respondent(s): City of Greater Sudbury

Property Location(s): 284 David Street

Municipality(ies): City of Greater Sudbury

Roll Number(s): 5307-060-011-09600-0000

Appeal Number(s): 3381657 and 3410972

Taxation Year(s): 2019 and 2020

Hearing Event No.: 737124

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

APPEARANCES:

Parties	Representative
Patrick Lehoux	Self-represented
Municipal Property Assessment Corporation	Andrew Rossanese
City of Sudbury	No one appeared

HEARD: December 2, 2020 by telephone conference call

ADJUDICATOR(S): Pierre R. Lavigne, Member

DECISION

OVERVIEW

1Patrick Lehoux (the “Appellant”) constructed a new detached house in 2018 and appealed the assessment for the 2019 and 2020 taxation years. The Subject Property is a residential single family detached two-storey structure of 4,006 sq. ft. of total building area. The construction quality is 8.5. The structure is newly constructed in 2018 on the site of a previously demolished older structure.

2The 2019 taxation year assessment of the Subject Property was returned at $1,012,000. The Municipal Property Assessment Corporation’s (“MPAC”) position is that the correct current value of the Subject Property as of the January 1, 2016 valuation date was $1,181,000 and that an equity adjustment $129,910 is required to bring the adjusted assessment to $1,051,090. However, MPAC is not seeking a greater assessment than the $1,012,000 originally returned. The Appellant takes the position that the value of the property, before any equity adjustment, should be $815,000.

3Because a decision on the 2019 appeal was not rendered by March 31 of the subsequent year, s. 40(24) of the Assessment Act R.S.O. 1990, c. A.31, the (“Act”) deems an appeal to have been made for the 2020 taxation year. This decision will apply for both years.

Issues for the Hearing

4At issue in this proceeding is:

1. What is the correct current value of the property as of the statutory valuation date of January 1, 2016?
2. Whether an equity reduction in the correct current value should be made?

Result

5The Board finds that the correct current value of the property for the 2019 and 2020 taxation years is $826,438. In addition, an equity adjustment $90,938 is required. As a result, the adjusted assessment for the 2019 and 2020 taxation years shall be $735,500 (rounded).

ANALYSIS

Issue 1 – What is the correct current value of the property as of the statutory valuation date of January 1, 2016?

The Law

6Section 36(1) of the Act requires land to be assessed annually. Section 19 (1) requires the assessment to be based on current value.

7The annual assessment is based on the state and condition of the property on the roll return date in the December immediately preceding the taxation year. See General Motors of Canada Limited v Municipal Property Assessment Corporation, Region No. 27, 2017 CanLII 3664 (ON ARB) (par.11-12).

8Section 19.2(1) paragraph 4 of the Act requires that all properties be valued as of the same date, January 1, 2016, for the four taxation years from 2017 to 2020. The question to be answered is: What would the value of the Subject Property have been on January 1, 2016 if it had been in the state and condition it was in, on the assessment roll return date in December 2018, immediately prior to the 2019 taxation year?

9Pursuant to s. 40(17) of the Act, the onus is on MPAC to prove the correct value of the Subject Property. The onus is on the Appellant to prove that any equity adjustment pursuant to s. 44(3) of the Act is required.

The Evidence

10The Appellant testified that he purchased the property in 2016 for $425,000. He indicated that the property is in a neighbourhood of older houses. On his street, the houses were mostly built in the 1950’s, though he said some in the neighbourhood were 100 years old.

11He spent a year imagining how he could renovate this older house to accommodate his needs. He indicated that he had some mobility issues as a result of a previous accident. In the end, he decided that the best solution was to demolish the existing old house and build new. He built a modern accessible home within a neighbourhood of 60 to 70-year old houses.

12He stated that his new home was much bigger and built to a higher quality level than the average home in his area. He also stated that he knew he could not resell the house for what it cost to build and that if he had put the house in a newer, more developed area it would be worth more.

Proposed Comparable Sales

13To determine the Subject Property’s value, MPAC’s assessor used the direct comparison method. He could find no new houses in the Subject Property’s neighbourhood, so he compared it to four sales of custom homes located in “newer subdivisions” that are an average of 3.75 km from the Subject Property’s neighbourhood. I have reproduced MPAC’s market analysis grid below:

14The assessor testified that he considered Property #1 at 53 Hidden Ridge Road to be most comparable. He considered Property #2 at 42 Hidden Ridge Road to be inferior as it was of lower quality build. He considered Property #3 at 683 Corsi Hill as superior on account of its much larger living area. He considered Property #4 at 14 Nova Drive to be inferior on account of its quality build and smaller living area.

15The assessor applied the $410 per sq. ft. value of Property #1 ($1,250,000 price divided by 3,044 sq. ft. total building area) to the 4,006 sq. ft. building area of the Subject Property, to produce an indication of value of $1,643,460. Notwithstanding that he judged this to be the most physically comparable property, he stated in his report that he did not believe that the Subject Property would realize this amount on the open market. He therefore derived the median value of $295.82 per sq. ft. of all four comparable properties, applied it to 4,006 sq. ft. of the Subject Property, to produce a current value of $1,181,000.

16The Appellant submitted the following sales in evidence, which he stated were chosen based on similarity of quality or construction, site area and total building area.

Address	Year Built	Quality	Building Total Area	Sale Price	Sale Date	Sale Price / SQ FT
1532 Madison Ave	1992	8	3832	$ 780,000.00	May 2015	$203.55
609 Corsi Hill	2008	7.5	3216	$ 865,000.00	Aug 2014	$268.97
19 Nova Drive	2010	7	3997	$ 850,000.00	Nov 2014	$212.66
340 Laura Ave	1912	8.5	3304	$ 500,000.00	Feb 2016	$151.33
591 Corsi Hill	2010	7.5	3991	$ 770,000.00	April 2014	$192.93
MEDIAN						$203.55

Analysis of Proposed Comparable Sales

17The Board has examined the proposed sales submitted by the Assessor and the photographs submitted in his report. The Board rejects Sales 1, 2 and 3 as comparable to the Subject Property principally because of the dissimilarity of locations.

18The photographs reveal that MPAC’s proposed comparable sales 1, 2 and 3 are all new homes on lots in newer subdivisions of similar housing that are on average 3.75 kilometers from the subject property. The Subject Property is also a new home, but it is in an old neighbourhood of 60+ year-old houses. It’s newness and architectural style make it incongruous in its neighbourhood, in stark contrast to MPAC’s proposed sales 1-3 new houses in newer subdivisions. In addition, comparable Sales 1, 2 and 3 are on lots that are twice as large as that of the Subject Property.

19MPAC’s Sale 4, though still in a dissimilar neighbourhood, is comparable in that it is on a similar sized lot and is closer in total building area. Its time adjusted sale price ($750,215) divided by total building area (3,610 sq. ft.) is $207.82 per sq. ft.

20The Board has also examined the Appellant’s proposed comparable sales which he submitted were selected for similar quality of construction, effective site area and total building area. The Board does not normally consider sales outside the shoulder years of 2015 and 2016, one year from the valuation day of January 1, 2016. The sale of 1532 Madison Avenue is within the shoulder years and will be considered.

21The 1532 Madison Avenue sale is comparable in quality (8) and total building area (3,832 sq. ft.) to the Subject Property. It was sold in May of 2015 for $780,000. Using the same time adjustment factor (1.006) found in the assessor’s report would produce a January 1, 2016 time-adjusted price of $784,680. As its total buildable area was 3,832 sq. ft., the value per sq. ft. was $204.77.

22The Board accepts the following information from the proposed comparable sales adduced by the parties: the average of the sq. ft. value of the assessor’s comparable Sale 4 at 14 Nova Avenue ($207.82) and the Appellant’s comparable sale at 1532 Madison Avenue ($204.77). This average of $206.30 applied to the Subject Property’s 4,006 sq. ft. of total buildable area produces a correct current value of $826,438 before any potential equity reduction.

Issue 2 - Whether an equity reduction in the correct current value should be made?

23The assessor’s equity evidence was an examination of assessment values compared to sale prices of similar property in the vicinity. This examination showed a general underassessment of similar properties in the vicinity. The median ratio of assessment divided by sale prices was 0.89. The assessor’s evidence was that a ratio of 0.95 to 1.05 is considered by MPAC to be sufficiently close to correct current value to conclude that there is equity.

24In the present case where his evidence similar properties in the vicinity were assessed at 89% of their sale prices, the assessor acknowledged that s. 44(3) of the Act requires a downward adjustment of the current value to make the assessment equitable to other under-assessed similar properties in the vicinity. Applying the ratio of 0.89 to his opinion of value of $1,181,000 of the Subject Property would produce an equity adjusted value of $1,051,090. As this amount was still in excess of the 2019 taxation year assessed value of $1,012,000, and as MPAC was not seeking an assessment at a higher value than the assessed value, the assessor submitted the assessed value, as originally returned, should be confirmed and the appeal dismissed.

25The Appellant’s equity evidence did not demonstrate a greater under assessment of similar properties in the vicinity. The Board will therefore accept the evidence of the assessor that similar properties in the vicinity are generally assessed at 89% of their value. Accordingly, the Board will adjust the correct current value of the Subject Property by a factor of 0.89. The adjusted assessment for the 2019 and 2020 taxation years will be $735,500 rounded, ($826,438 x 0.89).

CONCLUSION

26The Board finds that the January 1, 2016 valuation day correct current value of the Subject Property for the 2019 and 2020 taxation years is $826,438.

27The Board further finds that an equity reduction factor of 0.89 is required pursuant to s. 44(3) of the Act to produce an adjusted assessment of $735,500.

ORDER

28The Board orders the assessment be reduced from $1,012,000 to $735,500 for the 2019 and 2020 taxation years.