Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 21, 2020

FILE NO.: WR 164992

Assessed Person(s): Alan Benjamin Young

Appellant(s): Alan Benjamin Young

Respondent(s): Municipal Property Assessment Corporation Region 15

Respondent(s): Town of Milton

Property Location(s): 7500 McNiven Road

Municipality(ies): Town of Milton

Roll Number(s): 2409-070-301-10900-0000

Appeal Number(s): 3386857 and 3407206

Taxation Year(s): 2019 and 2020

Hearing Event No.: 729791

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

APPEARANCES:

Parties	Representative
Alan Benjamin Young	Self-represented
Municipal Property Assessment Corporation	Terence Johnston
Town of Milton	No one appeared

HEARD: May 20, 2020 by telephone conference call

ADJUDICATOR(S): Dan Weagant, Member

DECISION

OVERVIEW

1Alan Benjamin Young (the “Appellant”) noticed that there were some inaccuracies in his assessment when he received his notice from the Municipal Property Assessment Corporation (“MPAC”) for the 2019 taxation year. There were factual inaccuracies in the details related to the residential portion of the Subject Property, leading the Appellant to believe the assessment was incorrect. To address these inaccuracies and to correct what he believed to be an incorrect assessment he filed an appeal for the 2019 taxation year. Subject to s. 40(16) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”) the 2019 appeal was deemed for the 2020 taxation year as well.

2For the 2019 taxation year, MPAC returned an assessment of $1,446,000. This assessment was apportioned as follows:

• In the Residential property class: $901,900
• In the Managed Forest property class: $287,600
• In Conservation Land (exempt): $256,500

3In response to the appeal, MPAC carried out a property inspection and made a correction to the assessment for the absence of a garage that had been demolished but was still in MPAC’s records. The size of an existing tennis court was also adjusted. These two changes resulted in a reduced assessment of $1,420,000 for the 2020 taxation year. The reduction in assessment was made in the Residential property class apportionment.

4The Appellant viewed the updated value as still being too high. He believes the assessment of the Subject Property should be approximately $890,000. He arrived at this figure by comparing the assessments of similar properties in the vicinity to his property. His chief concerns with the assessment returned are the values attributed by MPAC to the land portion of the Subject Property.

Areas of Agreement

5The parties agree that the Subject Property has three components: a Residential component (7.2 acres), a Managed Forest component (31.79 acres), and a Conservation Land component (11.1 acres).

Issues for the Hearing

6At issue in this proceeding is:

1. A determination of the current value of the Subject Property, with consideration given to: a. Comparable Properties. b. Values of the component property classes present.
2. Whether an equity reduction in the current value should be made.
3. The means by which Managed Forest land is valued.

Result

7The Assessment Review Board (“Board”) finds that the current value of the Subject Property is $1,605,000. The Board also finds that there is evidence to support a reduction in this value for it to reflect equitable assessment when reference is made to the assessments of similar properties in the vicinity.

8Accordingly, the assessment of 7500 McNiven Road, for the 2019 and 2020 taxation years is reduced to $1,049,000, apportioned as follows:

• In the Residential Property Class: $683,200
• In the Managed Forest Property Class: $287,800
• In Conservation Land: $78,000

ANALYSIS

Description of Subject Property

9The Subject Property comprises 50 acres in total. Of that, 7.2 acres is in the Residential property class and includes two ponds of approximately 2.2 acres in total and a house and remaining lands covering approximately 5 acres. The house is a two-storey single family dwelling with 4,424 square feet of living area and a partially finished basement. The dwelling also has two attached garage structures. The residential lands are also improved with a tennis court and a storage building.

10A portion of the property comprises 11.31 acres of Conservation Land. These lands are in proximity to a stream that traverses the property. The remaining 31.49 acres are in the Managed Forest property class and are completely wooded.

11The property lies on the west side of McNiven Road. It is bounded on the north by a private campground and on the south by a place of worship, cemetery and monastery.

Issue 1 - What is the Current Value of the Subject Property?

12MPAC undertook the direct comparison approach to determining the current value of the Subject Property’s residential component. This method compares the Subject Property with the sale values of other properties that have sold and, by applying various adjustments, determines what the value of the Subject Property would have been if it had sold on the valuation day.

13In this case MPAC selected seven properties in the Town of Milton (“Milton”) that sold between November 2015 and October 2016; two to 10 months from the January 1, 2016 valuation day. The seven properties sold for prices in a range of $500,000 to $1,500,000 with time adjusted sale values ranging from $519,049 to $1,334,289. Sales that took place prior to the valuation day of January 1, 2016 were increased slightly and conversely, those that took place after the valuation day were decreased to reflect the upward trend of sale values in the overall residential market in the Milton area during the time span represented by these sales. Table A summarizes the comparative data of the seven sales selected by MPAC for comparison.

Table A

Comparable Property	Lot Size / Class	Dwelling Size	Year Dwelling Built	Sale Date & Value / Time Adjusted Sale (“TAS”) Value
#1 – 8129 first Line	3 acres Residential	1,777 square feet	1961	October 2016; $580,000 / $519,049
#2 – 9114 First Line	1 acre Residential	1,900 square feet	1965	August 2016; $869,000 / $796,097
#3 – 3144 Limestone Road	2 acres Residential	1,922 square feet	1968	November 2015; $900,000 / $917,002
#4 – 8575 First Line	5.5 acres Residential	1,791 square feet	1973	September 2015; $600,000 / $627,131
#5 – 8545 Twiss Road	2.17 acres Residential	2,672 square feet	1988	April 2016; $1,000,000 / $958,531
#6 – 3000 Limestone Road	2.15 acres Residential	3,806 square feet	1988	June 2016; $1,425,000 / $1,334,289
#7 – 7711 Milburough Road	24.81 acres; 1 acre Residential & 23.81 acres Managed Forest	2,561 square feet	1976	October 2016; $925,000 / $831,788

14By dividing the TAS value by the square footage of living area for each of the seven comparable properties, MPAC arrived at a range of values from $292.09 to $477.11 per square foot. MPAC’s median per square foot value of $350.58 was applied to the 4,424 square feet of living area of the Subject Property to arrive at a total value of $1,550,966, rounded to $1,550,000.

15MPAC qualified this finding as being the most likely minimum value that might be expected if the Subject Property had sold on the valuation day. The reasons for this assertion are that all of the comparable properties in MPAC’s analysis are inferior in value to the Subject Property and, MPAC’s valuation does not include any value attributed to either Managed Forest or Conservation land. None of the seven comparable properties includes conservation land and only one of the comparable properties includes an area of managed forest.

16Despite MPAC’s conclusion that $1,550,000 would be the minimum value expected for the Subject Property at the valuation day, it was not seeking an increase in the assessment and submitted that this value supported the assessment of $1,446,000 for 2019 and $1,420,000 for 2020.

17The Appellant used a different method of determining what he considered to be a correct and fair current value for the property. He focused on the assessed values of three nearby properties with similar attributes to the Subject Property. He submitted that the comparable properties used by MPAC in its assessment were not suitably comparable to his property and as a result, were unreliable as a means of determining current value. He pointed out that only one of MPAC’s seven comparables included Managed Forest and none of them included conservation lands.

18The Appellant’s three comparable properties were all located on McNiven Road, at addresses 7226, 7300 and 7600. These three properties range in size from 11.86 acres to 74.64 acres. One of these three properties has 13.64 acres of Managed Forest Land and one has 2.6 acres of Conservation Land.

19The approach taken by the Appellant was to make a separate determination on the three types of property classes present on the Subject Property. He then added those values to arrive the total current value.

20MPAC had two objections to the approach taken by the Appellant. It submitted that when sales evidence is available, assessments of nearby properties should not be given the same weight. Secondly, MPAC submitted that when determining current value, the whole of a sale value must be considered, and not the various values attributed to different components of a property that has been sold.

Findings on Issue 1 - Current Value

21The Board has widely held that in deciding current value, it must use the best evidence available. In doing so, the Board must also consider the definition of current value in the Assessment Act (“Act”). The definition refers to the amount of money a property would sell for, on the valuation day, which in this case is January 1, 2016. This indicates that evidence of value based on sales is preferable to other evidence.

22The Appellant did not advance a case based on sales. His submissions focused on the assessed values of nearby properties with similar attributes. This kind of comparison has merit when determining whether a property is equitably assessed, but at the current value stage of the Board’s deliberations, assessment comparisons are not considered to be as reliable as sales evidence.

23The Board has been presented with a total of seven properties with sale dates in proximity to the valuation day. These seven were submitted by MPAC as being sales in Milton that are the most comparable to the Subject Property. The Assessor admitted that it was difficult to find sales where there were three property classes represented, in the quantities evident at the Subject Property. However, he testified that the seven sales cited were the best available.

24Four of the seven properties in MPAC’s sample include dwellings of less than 2,000 square feet whereas the Subject Property has over 4,000 square feet of living area. The Board disregards these four properties in its decision.

25Two of the seven properties in MPAC’s sample include properties in the Residential Property Class, with lot sizes of 2.17 and 2.15 acres, whereas the Subject Property is 50 acres in size with three separate property classes. The Board disregards these two properties in its decision.

26The final property, at 7711 Milburough Road (‘Milburough’) is 24.81 acres is size; 23.81 acres of which is in the Managed Forest Property Class. It sold in October 2016 for $925,000, with a TAS value applied by MPAC of $831,788. The Board considers this final property advanced by MPAC to be the best indicator of the current value of the Subject Property.

27In order to apply the value of this best comparable to the Subject Property, some accounting must be made for the different property classes on both the Subject Property and the comparable property. To apply a per square foot value of the TAS at Milburough would ignore the impacts of the Managed Forest Property Class applicable to the two properties and the Conservation Land applicable to the Subject Property.

Accounting for Managed Forest Land

28As submitted by MPAC, Ontario Regulation 282/98 (“O. Reg. 282/98”), prescribes the land value of property that falls into the Managed Forest Property Class. For the purposes of determining current value in this class, the prescribed value in Milton is $9,138 per acre. When this value is applied to the Milburough property’s 23.81 acres of Managed Forest, the value of that part of this comparable property is $217,576. This value is helpful in that it can be deducted from the total TAS value to arrive at the value of the residential portion of Milburough, of $614,212.

29By dividing this resulting residential value by the square footage of the dwelling at Milburough a per square foot value of $293.83 is derived. When this is applied to the Subject Property’s 4,424 square feet of living area the result is $1,061,008. The Board notes that Milburough is improved with an older main dwelling and is situated on one acre of residential property class land, as opposed to the 7.2 acres of residential class land at the Subject Property.

30The Board finds that the current value is $1,605,264 ($1,605,000 rounded) as follows:

• Residential Property Class: $1,061,000 (rounded)
• Managed Forest Property Class: (31.49 acres x prescribed rate of $9,138 in O. Reg. 282/98): $287,500 (rounded)
• Conservation Land: (as returned): $256,500

Issue 2 – Should the current value found be reduced when reference is made to the assessments of similar properties in the vicinity?

31The Appellant compared his property to three properties in the vicinity; all three are on the same road as the Subject Property and experience the same impacts from the nearby church, monastery, cemetery complex and the nearby seasonal campground. In making this comparison, the Appellant took several separate steps in arriving at his equitable assessment value of approximately $890,000.

Step 1 – Residential Land Rate

32The Residential land rate applied by MPAC to the three properties cited by the Appellant ranges from $18,393 to 19,886, with an average of $19,097 per acre. He submits this average rate should also apply to 2.2 of the 7.2 acres of Residential land, resulting in a partial land value of $42,013.

33For the remaining 5.2 acres of residential land, the Appellant submitted an alternative value, based on the farm land value applied at 7226 McNiven Road where class 4 to 6 farmland is valued at approximately $7,000 per acre. He submitted that the characteristics of the residential land at the Subject Property were similar to unproductive farm land at a lower farm land class. Using the $7,000 per acre figure, the value of the remaining 5 acres of residential land is approximately $35,000.

Step 2 – Principal Dwelling Value

34The Appellant submitted further that the assessments of the building portion of the assessments at the three McNiven Road properties cited range from $76.91 to $147.70 per square foot with an average of $111.85. When he applies that value to the Subject Property’s 4,424 square foot dwelling, the Appellant arrives at a main dwelling value of $495,266.80. Despite this conclusion, the Appellant submitted that the value reflected in MPAC’s assessment for the dwelling of $532,998 was acceptable, indicating it was consistent with the values attributed to the dwellings of the three McNiven Road properties.

Step 3 – Secondary Structure Values

35In addition to the principal residence the Subject Property is improved by two attached garages, one storage shed and a tennis court. The Appellant accepted the value attributed to the tennis court by MPAC of $15,646 but submitted that the other three structures were over-assessed when their assessments were compared to the assessments of similar structures in the vicinity.

36The Appellant submitted that the 912 square foot storage shed was comparable to a similar structure at 7300 McNiven Road, assessed at $13.66 per square foot as opposed to the $59.76 per square foot applied by MPAC to the subject shed. He suggested that a slight increase to the comparable assessment to $15 per square foot was appropriate to reflect a slightly superior overhead door mechanism at the subject shed, for a total value of $13,680.

37Both attached garages are 431 square feet in size. The Appellant submitted that MPAC’s assessment applied a rate per square foot of $127.40; approximately $47 per square foot higher than the assessment of the finished dwelling. He contended that this makes no sense and that the assessments applied by MPAC to the attached garages at 7300 and 7600 McNiven Road were better indicators of value. These two attached garages were assessed at $24.20 and $26.91 per square foot, with an average of $25.56 per square foot. The Appellant submitted that $25 per square foot was therefore a reasonable assessment for the subject garages for a total of $21,550.

Step 4 – Managed Forest

38The Appellant’s view of Managed Forest land was that its value should reflect its value in the marketplace. Because the Managed Forest Property Class essentially restricts the use of the land for specific purposes, his view was that the assessment should reflect a reduction from what it would normally be assessed at. Using the same Residential Property Class value, he used for the 2 acres around the dwelling ($19,097) the Appellant applied a 25% valuation, to reflect the reduced value. He added that this 25% was loosely derived from the 25% property tax applied to the assessments of farmland. By applying this adjustment, he arrived at $4,774 per acre for the Managed Forest portion of the property. He submitted this was a fair value for land that has a very restricted use.

Step 5 – Conservation Land

39The Appellant acknowledged that the conservation land portion of the Subject Property was not subject to tax, but also expressed concern that government policy changes from time to time and that it was prudent for him to be diligent about the conservation land assessed value. The returned value of the conservation land was $256,500 or $22,679 per acre. This is approximately the same as the rate applied to the residential land portion of the Subject Property by MPAC. The Appellant submitted the conservation land component of 7226 McNiven Road of 2.6 acres was assessed at $18,036, or $6,937.14 per acre. The Appellant submitted that this rate is more reasonable and fairer than the rate applied to the conservation lands portion of the Subject Property.

40In summary, the Appellant presented the following as equitable assessment:

Residential Property Class:

House: $532,998

Land: 2.2 acres @ $19,097 = $42,013

5.0 acres @ $7,000 = $35,000

Secondary Structures: $50,876

Managed Forest Property Class:

31.49 acres @ $4,774: $150,333

Conservation Land:

11.31 acres @ $6,937: $78,457

41In response to the Appellant’s case for equitable assessment, MPAC prepared an equity analysis report that compared the TAS values of 30 residential properties in Milton. This analysis compares the assessments of these properties to their respective TAS values. The resulting ratio is referred to as the assessment to sale ratio or Assessment to Sales Ratio (“ASR”).

42Once the 30 ASR’s were derived, MPAC then determined the median ASR of the 30 properties in the sample. The result was 0.953. MPAC compares this median ASR to a range that it uses to determine if a property, in the same vicinity of the 30 properties in its sample, should have a reduced assessment. MPAC’s range, whereby it considers markets to be assessed equitably is from 0.95 to 1.05. Any median ASR derived by this method is considered to reflect equitable assessment by MPAC.

43To account for similarity, MPAC’s sample of 30 properties were described as single-family dwellings, not on water. MPAC’s position was that this description was adequate in this case to be considered as ‘similar’ to the Subject Property.

44MPAC’s analysis concluded that similar properties in the vicinity, as defined in this sample were assessed at approximately 95.3% of their respective sale values. As this result falls within its 95% to 105% acceptable range, MPAC views the Subject Property as not requiring any downward adjustment to the current value determined, and that the current value determined represents equitable assessment.

Findings on Issue 2 – Equitable Reduction

45The Act requires the Board to have reference to the assessments of similar lands in the vicinity to determine whether a reduction in the current value determined is necessary for it to represent equitable assessment. This requirement includes two important elements; ‘similarity’ and ‘vicinity’. Neither of these two terms are defined by the Act. The Board must decide on the suitability of similar properties and their vicinity in the context of the case before it.

46In this case, the Parties took two different approaches to determining whether the current value determined should be reduced to reflect equitable assessment. Any reduction of the current value determined is a change from an evidence-based decision of the correct value by the Board. Because of that, any reduction must be made on evidence that is compelling for the purpose.

47MPAC’s approach relies on a large-scale sampling of properties that sold in Milton in either 2015 or 2016. The 30 properties in the sample were described as ‘single-family dwellings, not on water.’ These 30 properties are similar to the Subject Property in that it is a single-family dwelling, not on water. But, the similarity between the Subject Property and the 30 equity study properties is unclear beyond that basic descriptor. The Board already heard from MPAC that the Subject Property is unique, for several reasons including its rural nature, its location between a religious compound and a campground, the presence of 2 ponds on the property, the presence of 31.29 acres of Managed Forest lands and 11.31 acres of conservation lands. MPAC’s submissions were clear in that the 30 properties in the equity study sample were not similarly described. The Board finds that MPAC’s evidence is inconclusive as to whether the current value determined should be reduced for the purpose of equitable assessment.

48The Appellant compared the assessments of three properties with similar attributes, on the same road as the Subject Property. The assessments of these properties, when reference is made to them for the purpose, are informative as to the equitable assessment of the Subject Property. Similar attributes include:

a. All three are on the same road as the Subject Property; b. They all have multiple property classes applied; c. They have similar characteristics with respect to dwellings in a rural-residential setting; and, d. They have similar exposure to the neighboring campground and place of worship complex.

49The only argument advanced by the Appellant that did not establish a comparison with similar properties in the vicinity was the equitable value of the Managed Forest lands. He submitted that because the land is restricted in its use, is has less value than it would if it did not carry the Managed Forest designation. He then applied an arbitrary reduction of 75% to account for the restriction in use.

50Lands that are in the Managed Forest Property Class have a prescribed method of determining current value. O. Reg. 282/98 has a table indicating the current value, on a per acre basis prescribed for each municipality in Ontario. For Milton, that value is $9,138. The Board therefore disregards the Appellant’s submissions on this point.

51The Board finds that the best evidence of equitable assessment for the Subject Property is as follows:

1. Residential land: The average assessments of the three properties cited by the Appellant, applicable to 7.2 acres. The application of a class of farm land as submitted by the Appellant is not appropriate as the Subject Property is not in the farm property class. Result: 7.2 acres x $19,097= $137,498.
2. Residential dwelling: The average per square foot assessments of the three properties cited by the Appellant, applicable to the subject dwelling. Result 4,424 square feet x $111.85= $494,824.
3. Secondary structures: The average per square foot assessments of the three properties cited by the Appellant. Result: two garages @ $10,775 each; one shed at $13,680; and one tennis court @ $15.646 for a total of $50,878.
4. Managed Forest land: the prescribed value per acre in O. Reg. 282/98 for Milton. Result 31.49 acres x $9,138= $ 287,756.
5. Conservation land: The assessment of conservation land at 7226 McNiven Road. Result: 11.31 acres x $6,937= $78,457.

52The Board finds that the total assessment of the Subject Property is reduced from the current value determined, to $1,049,000, rounded and apportioned as follows:

• In the Residential Property Class: $683,200;
• In the Managed Forest Property Class: $287,800; and
• In Conservation Land: $78,000.

CONCLUSION

53The Board finds that the current value of the Subject Property is $1,605,000. The Board also finds that there is evidence to support a reduction in this value for it to reflect equitable assessment when reference is made to the assessments of similar properties in the vicinity. The assessment of 7500 McNiven Road, for the 2019 and 2020 taxation years is reduced to $1,049,000.

ORDER

54The Board orders that the assessment of 7500 McNiven Road is reduced for the 2019 taxation year, from $1,446,000 to $1,049,000, apportioned as follows:

Residential Property Class: $683,200

Managed Forest Property Class: $287,800

Conservation Land: $78,000

55The Board orders that the assessment of 7500 McNiven Road is reduced for the 2020 taxation year from $1,420,000 to 1,049,000, apportioned as follows:

Residential Property Class: $683,200

Managed Forest Property Class: $287,800

Conservation Land: $78,000