MacAlasdair v. Municipal Property Assessment Corporation Region 09, 2021 CanLII 15225

Tribunals Ontario

Assessment Review Board

ISSUE DATE: February 24, 2021

FILE NO.: WR 167646

Assessed Person(s): Liling Zhang, Duncan S. MacAlasdair

Appellant(s): Duncan S. MacAlasdair

Respondent(s): Municipal Property Assessment Corporation Region 09

Respondent(s): City of Toronto

Property Location(s): 88 Scott Street, Suite 809

Municipality(ies): City of Toronto

Roll Number(s): 1904-064-220-00563-0000

Appeal Number(s): 3392309 and 3401184

Taxation Year(s): 2019 and 2020

Hearing Event No.: 736221

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

APPEARANCES:

Parties	Representative
Liling Zhang, Duncan S. MacAlasdair	Self-represented
Municipal Property Assessment Corporation	Ryan DeSousa
City of Toronto	No one appeared

HEARD: December 2, 2020 by telephone conference

ADJUDICATOR: Anthony LaRegina, Member

DECISION

OVERVIEW

1Duncan MacAlasdair and Liling Zhang (the "Appellants") filed appeals for the 2019 and 2020 taxation years with the Assessment Review Board (the "Board") regarding their property located at 88 Scott Street Suite 809 (the "Subject Property") in the City of Toronto ("City"). It is the Appellants' position that the Municipal Property Assessment Corporation's ("MPAC") current value assessment ("CVA") is too high and that the correct CVA should be $789,000. At this hearing, MPAC has taken the position that the CVA should be confirmed at $810,000. The current owners purchased the Subject Property from the builder September 17, 2018 for $824,989.

Issues for the Hearing

2At issue in this proceeding is:

1. a determination of the current value of the Subject Property; and,
2. whether an equity reduction in the current value should be made to compensate for the assessment of similar lands in the vicinity.

Result

3The Board finds that the current value of the Subject Property for the 2019 and 2020 taxation years is $1,026,000. Pursuant to s. 44(3)(b) of the Assessment Act, R.S.O. 1990, c. A.31 ("Act"), no further equitable reduction is required to the current value to compensate for the assessment of similar lands in the vicinity. MPAC is not requesting an increase and therefore the Board confirms the returned value of $810,000 for the 2019 and 2020 taxation years.

Description of Subject Property

4The Subject Property is a residential condominium apartment in a medium/high rise located at 88 Scott Street in the City of Toronto. The Subject Property Suite 809 is located on the eighth floor of a 57-storey glass tower with condominium residences starting on the second level and retail, offices and lounges on the podium level. The Subject Property is located in the downtown core financial district and close to St. Lawrence Market. The suites include balconies and or terraces with city and lake views. The amenities include, sauna, indoor pool, gym, meeting room, rooftop garden/deck and concierge. The property is located close to shops, restaurants, banks, Berkzy Park, Union Station with easy access to the Gardiner Expressway. The Subject Property is a one-storey condominium with a total building area of 1,337 square feet. It has two bedrooms, two baths and was built in 2017 with quality 7 construction. The Subject Property has one parking space and one locker space.

ANALYSIS AND FINDINGS

Issue 1 – Current Value

5The first issue to be determined on this appeal is the correct current value of the Subject Property for the 2019 and 2020 taxation years. Pursuant to s. 19(1) of the Act the assessment of land shall be based on its current value. The Act also provides that, for the 2017 to 2020 taxation years, MPAC is required to assess this value as of the valuation date, January 1, 2016 ("current value"). As defined in the Act, "current value means in relation to land, 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." Which translates into the market value of the Subject Property as of January 1, 2016.

6To determine market value MPAC utilized the direct sales comparison approach and submitted into evidence the sale of six proposed comparable properties in the vicinity of the Subject Property. The comparable properties rarely sell on the valuation day of January 1, 2016 and therefore their sale values are time adjusted to greater or reduced values depending on whether the date of the sale occurred before or after the valuation day. According to the time adjusted evidence of 451 sales of residential condominium properties submitted by MPAC, there was an 8.14% increase in market value over a 23-month period starting January 15, 2015 ending December 30, 2016. MPAC created a time adjustment factor table by month covering the same period and applied these values to time adjust the comparable sales which it provided in evidence.

MPAC's Comparable Properties

7The Board has reviewed and analysed the six proposed comparable property sales submitted by MPAC which sold between 2015 and 2016 in the vicinity of the Subject Property. (see Table 1 below).

Table 1 - MPAC's Comparable Property Sales

	Subject Property	Property 1	Property 2	Property 3	Property 4	Property 5	Property 6
Address	88 Scott Street Suite 809	388 Yonge Street Suite 6807	388 Yonge Street Suite 7107	388 Yonge Street Suite 6707	388 Yonge Street Suite 7016	388 Yonge Street Suite 7316	55 Front Street Suite 321
Current Value Assessment $	810,000	1,058,000	1,058,000	1,058,000	1,080,000	1,080,000	904,000
Sale Date		Jan 2016	Aug 2016	Aug 2016	Nov 2015	Oct 2016	Jan 2015
Sale Value $		1,110,000	1,175,000	980,000	1,010,000	1,100,000	989,900
TAS Value $		1,108,116	1,145,783	955,632	1,015,177	1,065,582	1,030,178
Sale Price Adj for Locker							1,026,178
TAS Value$/S.F.		$859.00	$888.20	$740.80	$769.66	$807.87	$770.40
Property Code and Description	(370) Residential Condo	(370) Residential Condo	(370) Residential Condo	(370) Residential Condo	(370) Residential Condo	(370) Residential Condo	(370) Residential Condo
Year Built	2017	2014	2014	2014	2014	2014	2013
Structure Variables	Corner with open Balcony	Corner	Corner	Corner	Corner Abuts Stairs	Corner Abuts Stairs	Corner with open Balcony
Storeys	1	1	1	1	1	1	1
Total Building Area Square Feet	1,337	1,290	1,290	1,290	1,319	1,319	1,332
Bedrooms	2	2	2	2	2	2	2
Baths	2	2	2	2	2	2	2
Parking Spaces	1	1	1	1	1	1	1
Locker	1	1	1	1	1	1	2
MPAC's Opinion of Comparability		Similar	Similar	Similar	Similar	Similar	Very Similar

8Ryan DeSousa, MPAC's Valuations Officer, submits that all six comparable sales are similar to the Subject Property in terms of building area, number of bedrooms and bathrooms, parking spaces and year built. Mr. DeSousa further submits that the best comparable is 55 Front Street Suite 321 as the building area is almost identical; it is also the only comparable sale which is a corner with an open balcony similar to the Subject Property and is located only 260 meters from the Subject Property.

9To determine current value as of January 1, 2016 Mr. DeSousa calculated the time adjusted sale value per square foot for each the six sales to be within the range of $740.80 to $888.20. Applying the median value of $786.14 to the Subject Property's building area of 1,337 square feet, Mr. DeSousa arrived at a current value of $1,055,077, rounded down slightly to $1,055,000. MPAC is not requesting an increase in value and therefore asks the Board to confirm the returned CVA of $810,000 for the 2019 and 2020 taxation years.

Appellants' Evidence of Current Value

10Mr. MacAlasdair, the Appellant, has entered no market-based evidence of comparable sales to support his submitted current value of the Subject Property.

11The Appellant has taken the position that the assessment value of the Subject Property should be based on the assessed value of Suite 909, which is located directly above his unit. Suite 909 is assessed at $806,000 and has an identical building to the Subject Property.

12Mr. MacAlasdair submits that there should be further downward adjustments of $17,000 to the assessed value of Suite 909 for the following reasons:

a) Subject Property should be $3,000 less than Suite 909 because it cost Suite 909 an additional $3,000 per floor when they purchased the suite from the developer.

b) Subject Property has one locker space, while Suite 909 has the equivalent of two locker spaces. The additional locker space cost $5,000 and therefore based on the fact Suite 809 only has one locker space there should be an additional downward adjustment of $5,000 from the assessed value of Suite 909.

c) Subject Property has a massive structural wall that is absent in Suite 909 and therefore has approximately 15 less square feet of internal floor space than Suite 909. Mr. MacAlasdair estimates that at a nominal value of $600 per square feet the unit should be further adjusted downward by $15,000.

d) Mr. MacAlasdair, as a retired professional engineer, claims that the Subject Property is not in compliance with the Ontario Electrical Code and that the deficiency has been brought to the attention of the developer and Tarion. He claims Suite 909 does not have these deficiencies and is currently in dispute with the developer. He acknowledges the impact on value is in debate and therefore requests no adjustments for electrical deficiencies.

13In summary, the Appellant submits that the assessed value of Suite 809 should be fairly assessed at $789,000 which is the $806,000 assessed value of Suite 909 with a downward adjustment of $17,000 to compensate for the additional floor, the 15 square feet of living area and the additional locker space that Suite 909 currently has.

Findings on Issue 1 - Current Value

14In support of establishing a current value for the Subject Property, the Board will rely on the six comparable property sales submitted by MPAC located within the two-kilometer radius from the Subject Property. MPAC has identified these properties as being the most similar property sales in the vicinity of the Subject Property.

15Based on the evidence submitted by MPAC, the Board finds that all six comparable properties are very similar to the Subject Property. They are all located in the vicinity, have very similar building areas, are all corner suites and all have two bedrooms and two baths. The Board also finds that the best comparable is 55 Front Street East, Suite 321, which is located 260 meters from the Subject Property on the south side of Berkzy Park. Both units are corner units with open balconies and both have identical features. Furthermore, the Subject Property has 1,337 square feet of building area, which is almost identical to 55 Front Street East, Suite 321, which has 1,332 square feet. The Board will therefore rely on the sale of 55 Front Street Suite 321 to determine current value of the Subject Property.

16The Board finds that the best evidence of current value of the Subject Property is the adjusted sale value of 55 Front Street East, Suite 321, reflecting an adjustment for time and additional locker, of $1,026,178 rounded to $1,026,000.

17Regarding the Appellant's submission that the Subject Property should be valued based on the assessment of Suite 909 in the same building which is almost identical to the Subject Property, the Board points out that this is not market-based evidence and does not reflect current value, which is based on the sale of similar properties in the vicinity. MPAC has clearly demonstrated based on the sale of similar properties that the current value of the Subject Property is substantially higher than its assessment.

18Regarding floor level adjustments, 55 Front Street East, Suite 321 is on the third floor and as the Subject Property is on the 8th floor, there is no need to make an adjustment to the value as submitted by the Appellant.

19The Board will make no adjustment for building area as the difference between the Subject Property and 55 Front Street East Suite 321 is only five square feet.

20The adjustment for the additional locker space at 55 Front Street East Suite 321 has already been compensated for in the adjusted sale value of $1,026,000.

21The Board finds the current value of 88 Scott Street Suite 809 to be $1,026,000 for the 2019 and 2020 taxation years.

Issue 2 – Equitable Reduction in Assessed Value

22Section 44(3)(b) 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."

23The Assessment to Sales Ratio ("ASR") of a sample of sold properties is a tool regularly used to determine if a property in the vicinity is assessed below its current value. If other properties are assessed below their current value, a reduction in the assessment below current value is required to make the assessment equitable with the assessments of similar lands in the vicinity. The ASR is determined by comparing the assessment as returned to the time adjusted sale price, expressed as a mathematical ratio.

24MPAC presented an equity analysis of 30 sales of residential condominiums, property code 370, that occurred from January 1, 2015 to December 31, 2016 located within one kilometre of the Subject Property, resulting in a median ASR of 0.992 with a Coefficient of Dispersion ("COD") of 4.6. MPAC's standards indicate that for residential property, the median ASR should fall between 0.95 and 1.05 and the COD should be less than 15. If the median ratio falls within this range, this reveals that the CVAs are reflective of sales prices in the vicinity and therefore, no further adjustment is required. In this case the median ASR falls within the range at 0.992 and the COD is 4.6. Therefore, MPAC recommends no further downward adjustment is required to the current value of the Subject Property.

25The Appellant points out that the Subject Property should be assessed in line with the assessment of Suite 909 which is an identical suite located one floor above the Subject Property. Mr. MacAlasdair submits that assessing the Subject Property in line with the assessment of Suite 909 would be fair and equitable.

Findings on Issue 2 - Equitable Reduction in Assessed Value

26The Board finds that MPAC's evidence of 30 property sales resulting in an ASR of 0.992 to be the best evidence in support of equity. This represents a broader and therefore, a more reliable sample of equity in comparison to the assessment of one property in the same building of the Subject Property. Furthermore, the 30 properties are all sales in the vicinity that are all time adjusted and the resulting ASRs are within the acceptable range of 0.95 to 1.05 while the one property submitted by the appellant has never sold since it was purchased from the builder. For all the above reasons the Board will reject the equity argument made by the Appellant in favour of the equity study presented by MPAC.

27The Board finds that based on MPAC's equity study which resulted in ASRs of 0.992 no additional downward adjustment is warranted to the current value of the Subject Property to ensure that the assessment is equitable with the assessments of similar properties in the vicinity.

CONCLUSION

28The Board finds that the correct current value of the Subject Property is $1,026,000 for the 2019 and 2020 taxation years. Furthermore, the Board finds that no equitable reduction is required under s. 44(3)(b) of the Act.

ORDER

29MPAC has not requested an increase from the returned assessment value therefore the Board orders the assessment of the Subject Property be confirmed at $810,000 for the 2019 and 2020 taxation years.