Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: November 10, 2020

FILE NO.: WR 165992

Assessed Person(s): David Allan Bradshaw; Lise Jeanne Marie Bradshaw

Appellant(s): David Allan Bradshaw; Lise Jeanne Marie Bradshaw

Respondent(s): Municipal Property Assessment Corporation, Region 32

Respondent(s): Township of Conmee

Property Location(s): 82 Fleming Road

Municipality(ies): Township of Conmee

Roll Number(s): 5819-000-000-03210-0000

Appeal Number(s): 3392318, 3392316, 3392317 and 3411369

Taxation Year(s): 2017, 2018, 2019 and 2020

Hearing Event No.: 734884

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

APPEARANCES:

Parties	Representative
David Allan Bradshaw; Lise Jeanne Bradshaw	Self-represented
Municipal Property Assessment Corporation	Kathleen Silen
Township of Conmee	Rosalie Evans (observing)

HEARD: September 3, 2020 by video conference

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1David Allan Bradshaw and Lise Jeanne Bradshaw, (the “Appellants”) appeal the 2017 omitted assessment of 82 Fleming Road (the “Subject Property”) to the Assessment Review Board (“the “Board”) on the grounds that the assessment is too high. s. 40(26) of the Assessment Act, R.S.O. 1990, c. A.31, (the “Act”), provides that “an appellant shall be deemed to have brought the same appeal in respect of a property…if the appeal is not finally disposed of by March 31 of the subsequent taxation year.” The Appellants are deemed to have brought the same appeal in respect of the 2018 to 2020 taxation years. The Appellants argue that the current value should be $280,000.

2For the 2017 and 2018 taxation years, the returned assessed value of the Subject Property was $40,000. In accordance with s. 33 of the Act, the Municipal Property Assessment Corporation (“MPAC”) made omitted assessments on the Subject Property. For the 2017 taxation year, MPAC issued a property assessment change notice (“PACN”) for an assessed value of $63,000. The Appellants initially appealed this assessed value but subsequently withdrew the appeal. MPAC then issued another PACN for a total current value assessment (“CVA”) of $381,000. The value of the omitted assessment appealed by the Appellants in the 2017 taxation year is $318,000. For the 2018 taxation year, MPAC also issued a PACN for a total CVA of $381,000. The value of the omitted assessment appealed by the Appellants for the 2018 taxation year is $341,000.

3The Appellants are deemed to have appealed the s.40 assessment of the Subject Property for the 2019 and 2020 taxation years, which MPAC returned at $381,000.

4MPAC requests that the Board confirms these assessments based on market sales.

5At the completion of the hearing, the Board reserved its decision.

ISSUES

6The issues to be determined are:

1. What is the correct current value of the Subject Property, as of the valuation date of January 1, 2016, for the 2017 to 2020 taxation years?
2. What is the correct value of the section 33 omitted assessment for the 2017 and 2018 taxation years?
3. Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?

Result

7The Board finds that the correct current value of the Subject Property, as of the valuation date of January 1, 2016, is $330,000. The Board reduces the current value assessment of the Subject Property from $381,000 to $330,000 for the 2017 to 2020 taxation years.

8Accordingly, the Board determines the correct value of the section 33 omitted assessments as follows:

a) for the 2017 taxation year, $267,000, the Board reduces the omitted assessment of the Subject Property from $318,000 to $267,000, and;

b) for the 2018 taxation year, $290,000, the Board reduces the omitted assessment of the Subject Property from $341,000 to $290,000.

9The Board finds that the assessments at current value is equitable with the assessments of similar lands in the vicinity, and therefore no further reduction is required.

Description of the Subject Property

10The Subject Property is a one-storey single-family detached residential dwelling, located in the Town of Conmee. MPAC assessed its three structures; the building (residence), an attached and a detached garage. Prior to the construction of the building on the Subject Property, it was valued by MPAC for its land and detached garage. The detached garage was built in 2014. The building was built in 2017 with an attached garage. It has a construction quality of 6.0. The effective and actual site area of the Subject property is 30.01 acres. It’s total building area is 1,766 square feet (“sq. ft.”), with no basement area.

ANALYSIS

Issue No. 1 - What is the correct current value of the Subject Property as of January 1, 2016 for the 2017 to 2020 taxation years?

11In accordance with s. 44(3)(a) of the Act, the Board is to determine “the current value of the land”. Section 1 of the Act defines current value 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”. That is, for the 2017 to 2020 taxation years, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.

12The 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. If, as in this case, no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation date of January 1, 2016.

Proposed Comparable Properties

13MPAC presented the Board with six Property Sales. Kathleen Silen, MPAC’s representative testified that these sales are comparable to the Subject Property. The details of these Property Sales are provided in Table 1.

Table 1

Address	Assessment ($)	Sale Date & Sale Amt. ($)	Time / Adjusted Sale ($)	Building/ Size (sq. ft.)	Lot Size (Acres)	Year Built	Quality of Construction
Subject Property
80 Fleming Road	381,000	N/A	N/A	1,766	30.01	2017	6.0
Sale 1
106 Pokki Road	301,000	December 2016 (291,300)	305,197	1,494	144.92	1998	6.0
Sale 2
282 Garbutt Road	215,000	July 2015 (250,000)	247,861	2,100	5	1993	6.0
Sale 3
80 Pokki Road	386,000	May 2016 (350,000)	355,164	2,006	5.11	2008	7.0
Sale 4
190 Holland Road East	408,000	July 2014 (390,000)	393.771	1,865	10.03	2002	7.0
Sale 5
1166 Harstone Drive	294,000	August 2013 (280,000)	315,543	2,257	10	1980	6.0
Sale 6
77 Pebblestone Road	417,000	December 2014 (425,000)	423,238	2,918	15.03	2004	7.0

14Ms. Silen testified that the most similar properties are property Sales 1, 3, 4, and 5 and based on this, MPAC estimates the current value of the Subject Property between $305,000 and $393,000. She submits that MPAC’s CVA of the Subject Property at $381,000 was derived from MPAC’s mass appraisal, and MPAC asserts that the CVA is reasonable, based on Property Sale 4 and this remains MPAC’s opinion of value.

15The Appellants did not present any proposed comparable properties to the Board, however, disagreed with MPAC that these six property sales are comparable to the Subject Property. The Appellants submit that the current value of the Subject Property should be $280,000. This was not based on the definition of current value in accordance to the Act, but on the cost of constructing the building and other additions on the Subject Property, which was not adduced in evidence by the Appellants.

16I find that Property Sales 1 and 3 are relatively comparable to the Subject Property. They both sold within the shoulder years of the valuation date of January 1, 2016, which is 12 months on either side of the valuation date. Property Sale 1 has a larger site area and a basement area. These superior features are accounted for in the age of its building, which is 19 years older than the Subject Property and it is 272 sq. ft. smaller than the Subject Property. Property Sale 3 has a smaller lot size and its building is older than the Subject Property, however, these inferior features are accounted for in its higher quality of construction of 7.0 and its basement area, measuring 2,006 sq. ft. These two Property Sales are located near the Subject Property, Property Sale 1 is 6.89 kilometers, and Property Sale 3 is 6.66 kilometers from the Subject Property.

17The Appellants argue that the Property Sales presented by MPAC with basement areas and two-storey structures are more valuable than the Subject Property. The Appellant did not provide any market evidence to support this. In Table 1, Sale 1 has a basement area, it was assessed by MPAC at $301,000 and it sold at a Time Adjusted Sale Price (“TASP”) of $305,197, lower than the assessment of the Subject Property. Property Sale 2 has a two-storey building, it was assessed by MPAC at $215,000 and it sold at a TASP of $247,861. Furthermore, the Subject Property is new, built in 2017, with a large site area, compared to the Property Sales presented by MPAC which have year-built ranging from 1980 to 2008. Only Property Sale 1 has a larger site area than the Subject Property; however, it is 19 years older than the Subject Property.

18I find that Property Sale 2 is inferior to the Subject Property, although it has a two-storey building, it is 24 years older than the Subject Property, with no basement area and a small site area of 5 acres.

19I will disregard Property Sales 4 and 5, as their sales dates of July 2014 and March 2013 are too far removed from the valuation date of January 1, 2016. The further a sale is from the valuation date, the less likely it reflects the market on the valuation date. It is also the practice of the Board not to rely on sales outside the shoulder years, if there are market tested sales within the shoulder years.

20I find that Sale 6 is superior to the Subject Property, due to its higher quality of construction of 7.0, it is a two-storey building, which is 1,152 sq. ft. bigger than the Subject Property.

21In determining the correct current value of the Subject Property, the Board used Property Sales 1 and 3, which the Board finds as relatively comparable to the Subject Property. The sum of the TASP for these sales is $660,361, dividing this by two, provides the amount of $330,180.50. I find that the current value of the Subject Property as of January 1, 2016 for the 2017 to 2020 taxation years is $330,000 (rounded).

Section 33 omitted assessments - 2017 and 2018 Taxation Years

22In accordance to s. 33 of the Act, MPAC is allowed to correct an omission “if land liable to assessment has been in whole or in part omitted from the tax roll for the current year or for all or part of either or both of the last two preceding years, and no taxes have been levied for the assessment omitted”.

23MPAC issued omitted assessments for the Subject Property due to the additional structures constructed on it. Ms. Silen testified that the omitted assessments represents the value of the additions to the land, which are the building, detached and attached garages. She further testified that the values of the additions were derived by MPAC based on the Market Valuation Model, based on sales in the vicinity of the Subject Property.

24I find that the assessed values of the s. 33 omitted assessment for the 2017 and 2018 taxation years to be $267,000 and $290,000 respectively.

25MPAC presented the best evidence on how it derived the values of the omitted assessments, which is in line with the definition of current value in the Act. MPAC used its proposed comparable sales and made the necessary deductions from its opinion of value, based on market valuation. Ms. Silen testified MPAC used the market valuation model for the cost of the building. She added that this is a complex model, in which various sales are used to derive the values for the different components of the Subject Property.

26Ms. Silen submits that the 2017 and 2018 values of the omitted assessments should be $318,000 and $341,000 respectively. She testified that MPAC arrived at the 2017 value, by deducting $63,000 being the value of the land and detached garage, from the CVA of the Subject Property, which MPAC asserts to be $381,000.

27According to Ms. Silen, MPAC derived the 2018 value, by deducting $40,000, being the value of the land from its current value assessment of the Subject Property at $381,000 to obtain the amount of $341,000. According to MPAC, this amount represents the value of all the additions; the building, attached and detached garages.

28The Appellants testified that it costs $200,000 to build the house. They submit that the current value of the Subject Property should be $280,000, being the cost of the building and all the additional structures on it. Apart from the Appellants testimony, there was no corroborating evidence to prove this figure.

29I have determined the correct current value of the Subject Property as of January 1, 2016 for the 2017 to 2020 taxation years to be $330,000. The original returned assessment for the 2017 taxation year was $40,000, MPAC issued a PACN with a value of $63,000, a deduction of $63,000 from $330,000 provides the amount of $267,000. The omitted assessment for the 2017 taxation year is reduced from $318,000 to $267,000, for a total current value of $330,000.

30For the 2018 taxation year, the original returned assessment was $40,000, (MPAC issued a PACN of $381,000, being the total assessed value of the Subject Property) a deduction of $40,000 from the determined current value of the Subject Property at $330,000, provides the amount of $290,000. The omitted assessment for the 2018 taxation year is reduced from $341,000 to $290,000 for a total current value of $330,000.

Issue No. 2 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)(b)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth) 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.

31Section 44(3)(b) of the Act directs that after determining current value, the Board shall 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”.

32The Assessment to Sales Ratio (“ASR”) is a tool often used to determine if a reduction in the assessment below current value is required to make an assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the Time Adjusted Sale Price (“TASP”).

33MPAC presented an equity analysis of 30 residential sales of single-family detached homes from January 1, 2012 to December 31, 2016 within 6 kilometres of the Subject Property. MPAC presented a median ASR of 1.018.

34Ms. Silen submits that MPAC standards indicate that equity is achieved if the median ASR falls between 0.95 and 1.05, which is in line with the International Association of Assessing Officers standards, which state that the median ratio should fall between 0.90 and 1.10. Furthermore, she adds that based on this analysis in accordance to the Act, similar properties in the vicinity are being assessed at or near their current values and therefore an equitable reduction of the current value is not required.

35The Appellants did not present any evidence for an equity adjustment.

36A review of MPAC’s equity analysis shows that MPAC used sales of residential homes from 2012 to 2016. The Board further reviewed MPAC’s equity analysis of 13 Property Sales, which sold between January 2015 to December 2016, this provides a median ASR of 1.023.

37I agree with MPAC that similar properties in the vicinity are being assessed at or near their current values and therefore an equitable reduction of the correct current value is not required.

CONCLUSION

38The Board finds that the correct current value of the Subject Property as of the valuation date of January 1, 2016 is $330,000 for the 2017 to 2020 taxation years and the correct assessed value of the omitted assessments for the 2017 and 2018 taxation years is $267,000 and $290,000 respectively, with no adjustment for equity.

ORDER

39The Board orders that:

a) the omitted assessment is reduced from $318,000 to $267,000 for the 2017 taxation year;

b) the omitted assessment is reduced from $341,000 to $290,000 for the 2018 taxation year, and;

c) the assessment is reduced from $381,000 to $330,000 for the 2019 and 2020 taxation years.