Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
December 02, 2021
FILE NO.:
WR 175342
Assessed Person(s):
Athanasios Polyzos; Katherine Polyzos
Appellant(s):
Athanasios Polyzos; Katherine Polyzos
Respondent(s):
Municipal Property Assessment Corporation Region 09
Respondent(s):
City of Toronto
Property Location(s):
6 Ridgefield Road
Municipality(ies):
City of Toronto
Roll Number(s):
1908-081-080-05700-0000
Appeal Number(s):
3435301 and 3441124
Taxation Year(s):
2020 and 2021
Hearing Event No.:
753389
Legislative Authority:
Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Representative
Athanasios Polyzos; Katherine Polyzos
Surin Toor
Municipal Property Assessment Corporation
Carlo Bassi
City of Toronto
No one appeared
HEARD:
November 15, 2021 by telephone conference call
ADJUDICATOR(S):
Jennifer Griffith, Member
DECISION
OVERVIEW
1Athanasios Polyzos and Katherine Polyzos the (“Assessed Persons/Appellants”) are the owners of 6 Ridgefield Road (the “Subject Property”) in the City of Toronto (the “City”). The Subject Property is a Single-Family Detached (not on water) dwelling, Property Code 301. The Appellants filed appeals for the returned assessment of $4,777,000 for the 2020 and 2021 taxation years with the Assessment Review Board (the “Board”), pursuant to s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”).
2It is the Appellants’ position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessment of $4,777,000 is too high and that the correct current value should be $4,200,000 based on sales evidence. MPAC takes the position that the correct current value should be $6,864,560 based on sale evidence. However, MPAC is not seeking an increase in the correct current value and is asking the Board to confirm the returned assessment of $4,777,000. No one appeared on behalf of the City.
3Pursuant to s. 19(1) of the Act, the assessment of land shall be based on its current value and s. 19.2(1)4 provides that, for the 2020 and 2021 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016.
4Pursuant to s. 40(11) of the Act, the municipality in which the land is located is a party to this proceeding; however, no one appeared on behalf of the City.
5Pursuant 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 an equity reduction is required.
Issues for the Hearing
6The issues to be determined on this appeal are:
What is the determination of the current value of the Subject Property for the 2020 and 2021 taxation years based on a direct comparison approach?
Whether there should be an equitable reduction of the current value pursuant to s. 44(3) of the Act, and, if so, what the amount of this reduction should be.
Result
7The Board finds the correct current value of the Subject Property is $4,248,000 as of the valuation date January 1, 2016, which is applicable to the 2020 and 2021 taxation years.
8The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.
9Therefore, the Board orders that the returned assessment of $4,777,000 be reduced to $4,248,000 for the 2020 and 2021 taxation years.
ANALYSIS
Issue 1 - What is the determination of the current value of the Subject Property for the 2020 and 2021 taxation years based on a direct comparison approach?
Direct Comparison Approach Based on Sales
10The Direct Comparison Approach estimates the market value by comparing the sale prices of similar properties (in terms of lot size, total building area, year built, quality of construction etc.) that have sold within a reasonable timeframe of the valuation date to the Subject Property. In this case the valuation date is January 1, 2016.
11In 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”.
12For the reasons discussed below, the Board finds the correct current value at the valuation date of January 1, 2016 is $4,248,000.
13Reviewing the evidence in support of current value, the Board finds the two sales of ravine type 2 comparable properties (one sale by MPAC and one sale by both MPAC and the Appellant) to be the best evidence of current value.
MPAC’s Evidence in Support of Current Value
14MPAC’s Representative presents a Valuation Report dated April 28, 2021, which he prepared and testifies to the information contained in the report.
15MPAC’s Representative testifies that the Subject Property is located in Lawrence Park, one of Toronto’s most affluent residential neighbourhoods, along with Rosedale, The Bridle Path, and Forest Hill.
16MPAC’s Representative also testifies that the Subject Property abuts a ravine type 2, which represents a positive adjustment of six percent to the current value. He further explains that the adjustments for ravine type 1 is ten percent; abutting school is a negative five percent; and corner lot is a negative one percent.
17In support of current value, MPAC’s Representative relies on the Direct Comparison Approach and presents 15 proposed comparable properties, sold over the period 2014 to 2016 which occurred in the Subject Property’s homogeneous neighbourhood identified as C70 and the neighbourhood of C66.
18MPAC’s Representative provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in his analysis. The following Table 1 is the analysis of the 15 proposed comparable properties:
Table 1
MPAC’s Sales Analysis
15 PROPOSED COMPARABLE PROPERTIES
NBHD
LOT SIZE (square foot (sq. ft.)
TOTAL BUILDING AREA (sq. ft.)
QUALITY RATING
YEAR BUILT
SALE DATE
SALE PRICE ($)
SALE PRICE (time adjusted (TAS) ($)
TAS (adjusted for site variables ravine, school, corner lot) per sq. ft. based on total building area) ($)
22 Blyth Hill Road
C70
7,450
4,625
9
2012
2014
4,900,000
5,927,037
1,230
17 Blyth Hill Road
C70
8,580
5,050
9
2004
2015
3,925,000
4,248,954
841
4 Ridgefield Road
C70
9,313
4,769
8.5
1998
2015
3,125,000
3,717,660
780
9 Ridgefield Road
C70
12,133
5,985
9
2008
2016
7,100,000
6,513,130
1,154
19Blyth Hill Road
C70
8,200
4,598
9
2008
2016
5,195,000
4,826,975
1,113
1 Stratheden Road
C66
9,595
5,699
9
2007
2016
5,200,000
4,770179
929
19 Stratheden Road
C66
9,240
5,629
9
2002
2015
5,450,000
6,276,580
1,182
31 Stratheden Road
C66
9,195
6,108
9
2012
2015
5,728,000
6,109,090
1,060
10 Stratheden Road
C66
10,125
6,186
9
2012
2015
6,630,000
7,071,101
1,212
248 Dawlish Avenue
C66
7,500
4,694
9
2013
2015
5,12500
5,465,971
1,246
115 Rochester Avenue
C66
7,500
4,499
9
2010
2015
4,575000
5,442,655
1.282
137 Rochester Avenue
C66
7,500
4,374
9
2001
2016
4,342,000
3,744,983
908
151 Rochester Avenue
C66
7,500
5,036
9
2008
2016
4,420,000
3,905,653
830
12 Bayview Wood
C66
16,470
6,985
9
1997
2015
5,325,000
5,438,077
825
132 Rochester Avenue
C66
7,500
4,752
9
2010
2016
4,750,000
4,717,303
1,052
Median
1,060
Subject Property
15,224
6,476
9
1998
NIL
N/A
N/A
N/A
19Based on the above analysis, MPAC’s Representative is of the view that the median adjusted TAS per square feet (“sq. ft.”) of $1,060 of all 15 sales to be the best evidence. When this rate is applied to the Subject Property it results in a current value of $6,864,560 ($1,060 x 6,476 sq. ft. of total building area for the Subject Property).
20Therefore, MPAC’s Representative is of the opinion that current value of the Subject Property is $6,864,560.
21MPAC’s Representative confirms that he has not adjusted for differences in characteristics such as lot size, total building area, quality, and year built. Instead, he relies on the median time-adjusted sale price per sq. ft. adjusted for ravine lots, corner lot and abutting school.
Appellants’ Evidence in Support of Current Value
22In support of current value, the Appellants’ Representative relies on the Direct Comparison Approach, and presents a spreadsheet analysis of six sales which occurred over the period 2015 to 2017 and located in the homogeneous neighbourhoods identified as C66, C70, C59 and C84. The Appellants’ Representative provides both the actual and time-adjusted sale prices and relies on the time-adjusted sale prices in his analysis. The following Table 2 is the analysis of the six proposed comparable properties:
Table 2
Appellants’ Sales Analysis
6 PROPOSED COMPARABLE PROPERTIES
NBHD
LOT SIZE (square foot (sq. ft.)
TOTAL BUILDING AREA (sq. ft.)
QUALITY RATING
YEAR BUILT
SALE DATE
SALE PRICE ($)
SALE PRICE (time adjusted (TAS) ($)
TAS (adjusted for ravine lot per sq. ft. based on total building area) ($)
12 Bayview Wood
C66
16,470
6,985
9
1997
2015
5,325,000
5,436,825
825.06
4 Ridgefield Road
C70
9,313
4,769
8.5
1998
2015
3,125,000
3,718,750
779.78
188 Valley Road
C59
16,431
7,348
8.5
1991
2017
4,990,000
4,164,480
600.76
12 Saintfield Avenue
C84
13,175
6,067
9
1987
2016
4,100,000
3,808,900
665.47
10 Suncrest Drive
C84
12,000
5,991
8.5
1988
2015
3,250,000
3,867,500
684.28
3 Salonica Road
C84
12,362
6,504
9
1990
2016
4,050,000
3,969,000
646.85
Median
12,768
6,285
8.75
1990
2015
4,075,000
3,918,250
674.88
Subject Property
15,224
6,476
9
1998
NIL
N/A
N/A
N/A
23The above analysis shows that these six proposed comparable properties when the time-adjusted sale prices per sq. ft. were further adjusted for ravine lot to reflect similar adjustment received by the Subject Property it results in median adjusted sale price of $674.88 per sq. ft. When this median adjusted sale price is applied to the Subject Property it results in a current value of $4,370,522 ($647.88 x 6,476 sq. ft. based on total building area).
24Based on the evidence, the Appellant’s Representative is of the opinion that the current value should be $4,370,522.
Finding of the current value of the Subject Property for the 2020 and 2021 taxation years
25Reviewing the evidence presented in support of current value, the Board finds the best evidence are the sales of two ravine type 2 comparable properties (one sale presented by MPAC and one sale by both MPAC and the Appellant) which occurred in 2015. These two comparable properties are located at 17 Blyth Hill Road, sold in 2015 at a time adjusted sale price of $4,248,954; and at 4 Ridgefield Road, sold in 2015 at a time adjusted sale price of $3,717,660.
26These two ravine type 2 comparable properties have on average a year built of 2001, a lot size of 8,946.5 sq. ft., a quality rating of 8.75, a total building area of 4,909 sq. ft., a time-adjusted sale price of $3,983,307 and located in the same homogeneous neighbourhood (C70) as the Subject Property. This is compared to the Subject Property with a year built of 1998, a lot size of 15,224 sq. ft., a quality rating of 9, a total building area of 6,476 sq. ft. and is also a ravine type 2 property.
27The Board finds that although the above two comparable properties are similar ravine type properties to the Subject Property, they are significantly smaller in total lot size and in total building. Therefore, the Board did not rely on the average time-adjusted sale price and finds that the Subject Property would sell at the higher time-adjusted sale $4,248,954, because the Subject Property is significantly larger in total building area and total lot size than the two comparable properties.
28Based on the above analysis, the Board finds that the time-adjusted sale of $4,248,954 represents the best evidence of an arm’s length transaction between a willing buyer and a willing seller pursuant to s. 19(1) of the Act. Therefore, the Board determines the correct current value to be $4,248.000 rounded.
29In regard to the sales of the remaining 13 comparable properties presented by MPAC (shown in the above analysis), the Board did not rely on these sales for the following reasons:
I. The sale at 22 Blyth Hill Road, sold in 2014 is a ravine type 1 property, whereas, the Subject Property is a ravine type 2 property. The Board finds that this sale date is too far removed from the valuation date of January 1, 2016 to provide any meaningful test of current value. Therefore, the Board relies on the sales which occurred in the shoulder years of 2015 and 2016;
II. The remaining twelve sales of comparable properties are not ravine type properties. Nine are located in a different homogeneous neighbourhood (C66) to the Subject Property, and there are significant differences in total building area, lot sizes, year built, site variances (abuts educational facilities, corner lot etc.) that would require substantial adjustments in order to make them similar to the Subject Property. As no quantifiable evidence was adduced before this Board to adjust for the majority of these differences, the Board relies on the two comparable properties (ravine type 2 as the Subject Property) located in the same homogeneous neighbourhood as the Subject Property, which the Board finds to be the best evidence of current value.
30In reviewing the Appellants’ six sales in support of current value, the Board relies on the sale of one comparable property at 4 Ridgefield Road, sold in 2015 (also presented by MPAC) in its findings of correct current value as stated above.
31The remaining five sales of comparable properties (shown in the above analysis), were not relied on by the Board, because these five comparable properties are not ravine type 2 properties, one comparable property was sold in 2017 well outside the valuation date of January 1, 2016, they are located in different homogeneous areas (C59, C66 and C84), and there are significant differences in total building area, lot sizes, year built, site variances (abuts educational facilities, corner lot etc.) that would require substantial adjustments in order to make them similar to the Subject Property. However, there is no quantifiable evidence adduced before this Board to adjust for the majority of these differences. Therefore, the Board relies on the two comparable properties (ravine type 2) located in the same homogeneous neighbourhood as the Subject Property, which the Board finds to be the best evidence of current value.
32Based on all the evidence, the Board find the correct current value is $4,248,000.
Issue 2 – Whether there should be an equitable reduction of the current value pursuant to s. 44(3)(b) of the Act, and, if so, what the amount of this reduction should be.
33Section 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 adjustment would result in a reduction of the assessment of the land.” In essence, the Board looks to similar lands in the vicinity to determine whether their assessed values are lower than their current values. If so, then it would be equitable to lower the assessed value of the Subject Property by a proportionate amount.
MPAC’s Evidence
34MPAC presents an Equity Analysis Report in which the assessments of 30 similar comparable properties (similar in general nature, character and function as the Subject Property) are compared to their respective sale prices to determine the Assessment to Sales Ratio (“ASR”). The ASR is computed by dividing the assessed values of the property sold by its sale price.
35MPAC states that these 30 comparable properties with Property Code 301- Single-Family Detached (not on water) are similar property type residential homes as the Subject Property, sold over the period January 1, 2015 to December 31, 2016 and located within 1.0 kilometre of the Subject Property.
36MPAC states that the analysis of the sales of these 30 comparable properties shows a Level of Appraisal (“LOA”) of 0.953 and a Coefficient of Dispersion (“COD”) of 10.0.
37MPAC explains that the LOA measures central tendency and the mid-point of the ASR ratios, and the median ASR is the preferred measure to determine the LOA, because it is not affected by very low or high ratios. MPAC also explains that the COD measures appraisal uniformity by determining the average deviation from the median ASR. Based on this finding, MPAC’s opinion is that an equity reduction is not required.
Appellants’ Evidence
38In support of Equity, the Appellants’ Representative relies on 260 residential sales that were used by MPAC to compute the Time Adjustment Factor for adjusting sale prices to the valuation date of January 1, 2016. The report indicates that these sales were from neighbourhood and adjoining neighbourhoods.
39The report shows that these 260 sales occurred over the period 2014 to 2016 with a median ASR of 0.957 and when the ASR is capped at an ASR of 1.70 it reflects a median ASR of 0.938. Based on this capping of the ASR, the Appellants’ Representative is of the opinion that an equity reduction is required.
40On cross-examination, the Appellants’ Representative states that the 260 sales used in his report include all residential properties except for (condominiums) and was unable to say exactly which neighbourhoods the sales were from, and how far away they are located in relation to the Subject Property.
Findings on Equity
41Based on the above evidence, the Board finds that MPAC presents the best evidence in support of equity, with the analysis of 30 sales of similar type properties Property Code 301 – Single Family Detached (not on water) as the Subject Property. They are similar in nature, character and function; and located within 1.0 kilometre of the Subject Property.
42The analysis shows that these 30 sales of similar properties have a LOA (ASR) of 0.953 which falls within MPAC’s standard of 0.95 – 1.05 and within the International Association of Assessing Officers (“IAAO”) standards of 0.90 – 1.10 which the Board accepts and finds that this evidence does not support an equity reduction.
43The Board rejects the Appellants’ equity analysis of 260 proposed comparable properties for the following reasons:
I. The analysis includes sales which occurred in 2014 well outside of the valuation date of January 1, 2016, to be a true test of equity;
II. The sales are from distances not defined in the report, which does not demonstrate its’ location in relation to the Subject Property;
III. The sales include residential properties such as townhouses and semi-detached that are not similar to the Subject Property, which is a single family detached home; and
IV. The Appellants’ Representative relies on the median ASR of 0.938 which was based on capping the sales at an ASR of 1.70, as opposed to the median of all 260 sales with an ASR of 0.957, which does not support an equity reduction. The Board finds that this approach seems to demonstrate a lack of confidence in the report presented in support of an equity reduction.
44Based on the above evidence, the Board finds that an equity reduction is not required.
CONCLUSION
45The Board finds the correct current value for the Subject Property at the valuation date January 1, 2016 is $4,248,000. This correct current value is applicable to the 2020 and 2021 taxation years.
46The Board also finds that an equity reduction pursuant to s. 44(3)(b) is not required.
ORDER
47The Board orders the returned assessment of $4,777,000 be reduced to $4,248,000 for the 2020 and 2021 taxation years.
"Jennifer Griffith"
JENNIFER GRIFFITH
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb