Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: December 03, 2020
Assessed Person (s): Domenica Di Matteo and Antonio Di Matteo
Appellant(s): Domenica Di Matteo and Antonio Di Matteo
Respondent(s): Municipal Property Assessment Corporation, Region 9
Respondent(s): City of Toronto
Property Location(s): 26 George Street
Municipality(ies): City of Toronto
Roll Number(s): 1914-064-210-03350-0000
Appeal Number(s): 3394496 and 3400256
Taxation Year(s): 2019 and 2020
Hearing Event No.: 736206
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Representative
Domenica Di Matteo and
Anthony Di Matteo
Antonio Di Matteo
Municipal Property
Loris Fata
Assessment Corporation
City of Toronto
No one appeared
HEARD: November 20, 2020 by telephone conference call
ADJUDICATOR(S): Jean-Paul Pilon, Member
DECISION
OVERVIEW
1Anthony Di Matteo appealed the assessment of a residential property at 26 George Street in Toronto (the “Subject Property”) for the 2019 taxation year pursuant to section 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on behalf of his parents, Antonio Di Matteo and Domenica Di Matteo (the “Appellants”). A further appeal for the 2020 taxation year was deemed pursuant to section 40(26) of the Act.
2The Municipal Property Assessment Corporation (“MPAC”), represented by Loris Fata at the hearing, returned a current value assessment for both taxation years of $597,000. MPAC did not serve a notice that it would seek a higher assessment pursuant to Rule 40 of the Assessment Review Board’s (the “Board”) Rules of Practice and Procedure (the “Rules”) despite its position at the hearing that the current value of the Subject Property was $652,000. The Appellants’ position was that the current value assessment should have been between $530,000 to $540,000 for both taxation years.
Background
3In its valuation report, MPAC relied on sales data from seven transactions for six different properties close to the Subject Property using the direct comparison approach. MPAC supplemented that analysis with further analyses that supported its conclusion of current value. MPAC produced a further report suggesting that no adjustment to the current value was required to make it equitable with other assessments of similar properties in the vicinity of the Subject Property.
4The Appellants’ representative proposed his own comparable properties. He also disputed MPAC’s proposed comparable properties, raised issues relating to renovations of the Subject Property and negative features of the street upon which it is located, and, indirectly, made submissions that there should be an equitable adjustment to the correct current value of the Subject Property.
Issues for the Hearing
5At issue in this proceeding is:
- A determination of the current value of the subject property considering:
a. Comparable Properties;
b. Renovations to the Subject Property; and
c. Locational issues with the Subject Property.
- Whether an equity reduction in the current value should be made.
Result
6The Board finds that the correct current value of the Subject Property is $652,000, that there should be no adjustment in equity, and that the returned current value assessment of $597,000 should be confirmed.
ANALYSIS
Description of Subject Property
7The Subject Property is comprised of a detached house and surrounding land in the Weston area of Toronto. The site area of the Subject Property is 4,294 square feet (“sq. ft.”) and the house has a total area of 1,500 sq. ft. It was built in 1975 and was renovated in 2018, although, as noted above, the extent of those renovations was an issue at the hearing.
Issue 1 – Current Value
Comparable Properties
MPAC’s Proposed Comparable Properties
8MPAC’s six proposed comparable properties, one of which was the subject of two sales transactions, were all located within 1.06 km of the Subject Property. They had all been the subject of sales transactions in either 2016 or 2017, where the valuation date was January 1, 2016.
9As discussed in more detail below, all six properties were noted by MPAC as having “B” quality renovations, which meant that there had been minimal or small changes resulting from the renovations. “C” renovations, on other hand, would have indicated medium changes in renovations, and “D”, major changes.
10All of MPAC’s proposed comparable properties were substantially older than the Subject Property which was built in 1975. However, all renovations had been reflected in their “effective built” dates, or the dates to which MPAC determined they had been updated. Four of MPAC’s proposed comparable properties had effective built dates in the 1960’s and 1970’s, except for two in 2001 and 2002, where the Subject Property had an effective built date of 2002.
11Based entirely on the basic information in MPAC’s market analysis grid in its report, MPAC’s proposed comparable properties were mostly similar to the Subject Property in site area and building size. Where they differed was in those effective built dates, where most were older than the Subject Property, and in the fact that all but one had attached or detached garages where the Subject Property had none.
12MPAC’s position was that all their proposed comparable properties were inferior to the Subject Property except its second at 58 Boyd Avenue which was relatively comparable. This was primarily because it was closest in its effective built date to the Subject Property.
13After adjusting sales prices for the passage of time, which was not contested at the hearing, MPAC determined a median per sq. ft. sale price of the buildings on each property of $435 per sq. ft. and a mean of $443 per sq. ft. Applying the lower of these, the median of $435 per sq. ft., to the square footage of the Subject Property of 1,500 sq. ft. resulted in a value of $652,000, which was, in MPAC’s submission, the correct current value of the Subject Property. This exceeded the returned assessment of $597,000.
Appellants’ Comparable Properties
14The Appellants’ representative had 12 proposed comparable properties of his own, but only two of those had been the subject of sales transactions.
15One of these proposed comparable properties, 211 Rosemount Avenue, was not useful because its sale transaction took place in August 2014, where MPAC’s transactions all occurred within the shoulder years of the valuation date of January 1, 2016. 211 Rosemount also had more than twice the site area of the Subject Property.
16The second of the Appellants’ proposed comparable properties was 231 Rosemount Avenue which sold in June 2016. However, the house on that property was smaller and the site area larger than those of the Subject Property. With an unadjusted sales price per sq. ft. of $576 compared to MPAC’s conclusion of $435 per sq. ft. for the Subject Property, 231 Rosemount Avenue was not considered because it did not assist the Appellants’ position in the appeals.
17Additional proposed comparable properties appeared in the written submission of the Appellants’ representative. One was 25 Joseph Street, but this transaction occurred in May 2019, well beyond the valuation date of January 1, 2016. Nevertheless, two earlier transactions of this proposed comparable property occurred in the shoulder years to the valuation date and were included in MPAC’s analysis. There was insufficient information about other proposed comparable properties that had sold in the Appellants’ submission, namely 127 William Street and 195A King Street for them to be included in the analysis.
MPAC’s Further Analyses
18MPAC’s representative testified that he had discussions with the Appellants’ representative and produced two additional analyses to address the concerns that were raised. The first was an analysis of the sales prices of duplexes in the same area as the Subject Property which, in MPAC’s submission, determined that they sold for less on a per sq. ft. basis than single family dwellings like the Subject Property. MPAC argued that duplex properties were not therefore comparable. The second analysis examined similar properties slightly farther away from the Subject Property to demonstrate in MPAC’s submission that locational issues in the two areas had no impact on current value. Both of these are discussed below, and both supported MPAC’s primary analysis on correct current value.
Duplexes
19The first issue raised by the Appellants’ representative in these discussions was the exclusion from MPAC’s analysis of the property next door to the Subject Property, 26 George Street.
20The Appellants’ representative argued that 26 George Street was the most comparable property to the Subject Property. There was, however, no evidence before the Board of any sale of that property that would have indicated its correct current value. Moreover, MPAC’s representative testified that that property was a duplex unlike the Subject Property and therefore not comparable. In addition, MPAC completed this further analysis to demonstrate that duplex properties had lower sales prices per sq. ft. than single family dwellings.
21In MPAC’s submission, duplexes close to the Subject Property had median time adjusted per sq. ft. sales prices of $367 compared to $435 per sq. ft for single family dwellings as outlined above. MPAC argued this proved that duplexes were not comparable and should not be considered in the determination of correct current value.
22MPAC’s analysis on duplexes was not contradicted at the hearing. In addition, it showed a significant difference between the sales prices of single-family homes, of which there were many in evidence, and duplexes. Therefore, the Board finds that 26 George Street is not comparable to the Subject Property for the purpose of determining the correct current value of the Subject Property.
Renovations
23MPAC’s representative testified that the reason for the substantial increase in the current value assessment in the current taxation cycle was because there were renovations to the Subject Property made pursuant to a building permit. The Appellant testified that those renovations, which comprised the construction of one wall, the removal of another, the addition of a post and a foundation pad in the basement for accessibility purposes, were primarily cosmetic which mostly would not have required a permit.
24The problem with the Appellants’ submission on this point was that the renovations were, in fact, considered by MPAC to be minor in its report as noted above, as “B” renovations for “minimal or small changes.” Moreover, the renovations to all of the rest of MPAC’s proposed comparable properties were also considered as “B” renovations. This suggested that the renovations to the rest of MPAC’s proposed comparable properties might not have been as extensive as the Appellants’ representative thought, where most of his information came from expired real estate listings. For one of MPAC’s proposed comparable properties, 25 Joseph Street, which sold twice in the shoulder years, the Appellant’s real estate listing was from a sale transaction in 2019, and it was unclear when the renovations to that property took place.
25The property in MPAC’s primary analysis that the Appellants’ representative testified was the most renovated and least comparable was 58 Boyd Avenue. However, even if the Appellants’ representative was correct on the question of comparability and that property was removed from the analysis, the final result would not be significantly different. This is because the adjusted per sq. ft. median from the remaining six transactions would be reduced to $432 per sq. ft. from $435 per sq. ft., resulting in a current value of $648,000. This still exceeds the current value assessment returned by MPAC.
26The Board finds the renovations to the Subject Property and MPAC’s proposed comparable properties not to be a significant factor in determining the correct current value of the Subject Property using the direct comparison approach.
Locational Issues
27The Appellants’ representative first argued that the location of the Subject Property, near large apartment buildings and a school, should result in a negative adjustment to the assessment of the Subject Property. Second, the Appellants’ representative argued that the Subject Property’s neighbourhood was less desirable than a nearby neighbourhood in which some of MPAC’s proposed comparable properties were located.
28On the first point, there was no evidence to support the Appellants’ position that there should be any adjustment to account for the proximity of a school and apartment buildings to the Subject Property. Even if those buildings did have any impact on the value of the Subject Property, there was no evidence before the Board as to what any adjustment should be.
29On the Appellants’ second point, MPAC’s representative produced a further analysis that examined comparable properties in this other neighbourhood identified at the hearing as C03, when the Subject Property is in the C02 neighbourhood.
30In that analysis, MPAC’s representative took a sale of a similar property very close to the Subject Property in C02 that was more comparable to other properties in the C03 neighbourhood. He determined the sales prices in these two neighbourhoods to be substantially similar. His conclusion was, quoting from his report, that “an adjustment for location is not required relative to the market conditions prevailing as at the legislated valuation date of January 1, 2016.”
31The Board finds that the evidence does not support any adjustment to take into account the Appellants’ locational issues raised at the hearing.
Findings on Issue 1
32The Board finds that there should be no adjustment to account for the issues raised by the Appellants regarding renovations and the location of the Subject Property. In addition, the Board is limited to considering the evidence before it and the best evidence of the value of the Subject Property is in the proposed comparable properties relied upon by MPAC.
33As a result, applying the adjusted median per sq. ft. value of $435 to the square footage of the Subject Property of 1,500 sq. ft., the Board finds that the correct current value of the Subject Property is $652,000.
Issue 2 – Equity
34Section 44(3)(b) of the Act provides that “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 assessment would result in a reduction to the assessment of the land.”
35MPAC produced an equity report which determined that there should be no adjustment in equity because the assessment to sale ratio (“ASR”) was 0.985, very close to 1.00.
36The Appellants’ representative argued that the Subject Property’s assessment was not equitable with those of other similar properties in the vicinity. Specifically, the Appellants’ representative argued that properties on Fern Street and Queens Drive had lower assessments than the Subject Property.
37As with most of the Appellants’ proposed comparable properties, these properties were not the subject of sales transactions. Had the properties been identical or nearly identical to the Subject Property, their lower assessments above might have demonstrated inequity in assessment. However, the Appellants’ material also suggested that they were not close to identical to the Subject Property, therefore they were not useful in the equity analysis.
38The Appellant argued that the property next door to the Subject Property, 26 George Street mentioned above, was almost identical to the Subject Property, yet was only assessed at $511,000.
39As noted above, 26 George Street was a duplex, raising the question as to whether it met the requirement of being “similar lands” in section 44(3)(b) of the Act. However, leaving aside the similarity issue, dividing that property’s assessment by the returned current value assessment of the Subject Property resulted in a ratio of 0.86. Adding that ratio to the 30 properties used by MPAC in its equity analysis that were uncontested at the hearing made little difference in the final analysis, lowering the ASR from 0.985 to 0.982, which would not have justified any adjustment in equity.
40A further analysis was undertaken using the additional properties in C03 that sold during the shoulder years, namely 15 Rectory Road, 19 Rectory Road and 21 Rectory Road. These properties were not considered by MPAC in their main analysis because their buildings were substantially smaller, however they arguably might have been similar enough to the Subject Property for the purpose of an equity analysis.
41Together, these three properties alone had a median ASR of 0.90, which would have justified an adjustment in equity because it was below the generally accepted range of 0.95 to 1.05. However, when these three were added to the 30 properties used by MPAC as well as the property at 26 George Street, the result was a median value of 0.954 which would not have supported any equitable adjustment.
42As a result, the Board concludes that the returned current value assessment of $597,000 is not inequitable.
Finding on Issue 2
43There should be no adjustment in equity.
CONCLUSION
44The correct current value of the Subject Property is $652,000.
45No equitable reduction of the correct current value of the Subject Property pursuant to section 44(3)(b) of the Act is required.
46MPAC has not served a notice of intention to seek a higher assessment as required by Rule 40 and indicated at the hearing that it was not seeking a higher assessment. Therefore, the assessment of the Subject Property at $597,000 is confirmed for the 2019 and 2020 taxation years.
ORDER
47The Board orders that the assessment of 26 George Street, Toronto is confirmed at $597,000 in the residential property class for the 2019 and 2020 taxation years.
“Jean-Paul Pilon”
JEAN-PAUL PILON
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb
Telephone: 416-212-6349 Toll Free: 1-866-448-2248```