Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: March 02, 2021

FILE NO.: WR 167842

Assessed Person(s): Joseph Anthony Battaglia and Elizabeth Lauren Battaglia

Appellant(s): Joseph Battaglia and Elizabeth Battaglia

Respondent(s): Municipal Property Assessment Corporation Region 15

Respondent(s): City of Mississauga

Property Location(s): 144 Oakes Drive

Municipality(ies): City of Mississauga

Roll Number(s): 2105-010-012-19600-0000

Appeal Number(s): 3394055 and 3406231

Taxation Year(s): 2019 and 2020

Hearing Event No.: 736183

Legislative Authority: Sections 32 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
Joseph Battaglia	Self-represented
Municipal Property Assessment Corporation	Marissa Cheddi and Laurie DeWinter
City of Mississauga	No one appeared

HEARD: December 8, 2020 via teleconference call

ADJUDICATOR: Anthony LaRegina, Member

DECISION

OVERVIEW

1Joseph Battaglia (the “Appellant”) filed appeals for the 2019 and 2020 taxation years with the Assessment Review Board (the “Board”) regarding his property located at 144 Oakes Drive in the City of Mississauga (“Subject Property”). It is the Appellant’s position that the Municipal Property Assessment Corporation’s (“MPAC”) current value assessment for the Subject Property is too high and that the correct current value assessments should be $2,125,439 for both 2019 and 2020 appeals. At this hearing, MPAC takes the position that the current value assessment should be reduced from $2,582,000 to $2,517,000 for the 2020 section 40 appeal and reduced from $2,893,000 to $2,517,000 for the section 32 2019 appeal, excluding the value of the pool.

2Pursuant to section 40(11) of the Assessment Act (the “Act”), the City of Mississauga is a party to this proceeding. However, it took no position on the issues raised in these appeals, and no one appeared at the hearing on behalf of the City.

Issues for the Hearing

3At 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

4The Board finds that the current value of the Subject Property for the 2019 and 2020 taxation years is $2,463,000. Pursuant to section 44(3)(b) of the Act, no further equitable reduction is required to the current values to compensate for the assessment of similar lands in the vicinity.

BACKGROUND AND DESCRIPTION OF THE subject PROPERTY

5The Subject Property is a single family detached not on water located at 144 Oakes Drive in the City of Mississauga in the residential area know as Mineola East. The Subject Property is classified as Residential Full. The structure is a two-storey home with quality 8 construction built in 2018 with a total building area of 4,363 square feet of which 2,316 square feet is located on the first floor, 2,047 square feet on the second floor and 2,396 square feet in the basement with no finished space. The lot has an actual and effective frontage of 75 feet by an actual and effective depth of 200.67 feet. The effective site area is 0.34 acres. The home has 4 bedrooms, 4.5 bathrooms, 2 fireplace, air conditioning and forced air heating. The Subject Property also has an attached garage with a building area of 528 square feet and an outdoor fireplace.

6The Appellant purchased the Subject Property on May 1, 2013 for $1,057,000 with an older residential structure that was removed when he constructed his home. The remaining land value was assessed at $916,000 for the 2018 and 2019 taxation years while he was building his home. The home was finished on March 11, 2019 and a Property Assessment Change Notice was issued by MPAC for $1,977,000 to reflect the new home construction. This brought the total assessed value to $2,893,000 for the 2019 taxation year. As a result of the Request for Reconsideration (RFR) process, MPAC conducted an inspection of the Subject Property, and a recalculation of 2016 total property current value assessment (“CVA”) took place resulting in a value of $2,582,000, which was reflected for the 2020 taxation year. MPAC did not make the changes on the 2019 taxation year as the Appellant did not accept the changed value. Therefore, the Property Assessment Change Notice value remains at $1,977,000, and the total CVA remains at $2,893,000 for the 2019 taxation year.

7In addition, since filing this appeal, a further Property Assessment Change Notice was issued with a value of $49,000 to reflect the addition of the new pool, effective September 18, 2019.

ANALYSIS AND FINDINGS

Issue 1 – Current Value

8The first issue to be determined on these appeals are the correct current values of the Subject Property for the 2019 and 2020 taxation years. Pursuant to section 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.

9In order to determine the market value, MPAC has utilized the direct sales comparison approach and submitted into evidence the sale of 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 submitted by MPAC, there was a 31.05% increase in market value over a 23-month period starting on January 6, 2015 and ending on December 29, 2016. MPAC created a time adjustment factor table by month covering the same period and applied these values to time-adjust the comparable sales provided in evidence.

Comparable Properties

10The Board has reviewed and analysed the three suggested comparable property sales submitted by MPAC, which were sold during 2015 in the vicinity of the Subject Property (see table below).

	Subject Property	Property 1	Property 2	Property 3
Address	144 Oakes Drive	1490 Lochlin Trail	1571 Crestview Avenue	190 Maplewood Road
Distance from Subject Property kilometers		0.551	0.648	0.464
Current Value Assessment $	2,893,000(2019) 2,582,000(2020)	2,436,000	2,153,000	2,462,000
Sale Date		February 2015	July 2015	August 2015
Sale Value $		2,338,000	2,207,000	2,436,600
Time Adjusted Sale Value $		2,487,943	2,323,045	2,548,471
Property Code and Description	(301) Single Family Detached Not on Water	(301) Single Family Detached Not on Water	(301) Single Family Detached Not on Water	(301) Single Family Detached Not on Water
Actual/Effective Year Built	2018	1953/2009	2007	1951/2010
Quality	8	8	8	8
Effective Site Area Acres	0.34	0.3	0.37	0.3
Frontage x Depth Actual and Effective (Feet)	75 x 200.67	90 x 152	100 x 165	90 x 150
Actual Site Area Acres	0.35	0.31	0.38	0.31
Total Building Area Square Feet	4,363	4,315	3,261	4,405
First Floor Area (square feet)	2,316	2,014	1,688	2,977
Second Floor Area (square feet)	2,047	2,301	1,573	1,428
Basement Area (square feet)	2,395	2,122	1,776	3,046
Finished Basement Area (square feet)	0	1,812	1,207	0
Full Storeys	2	2	2	2
Bedrooms	4	4	4	6
Baths	4.5	5	3.5	3.5
Air Conditioning	Yes	Yes	Yes	Yes
Fireplaces	2	1	2	1
Outdoor Pool	Yes	Yes	Yes	No
MPAC’s Opinion of Comparability		Similar	Similar	Similar

11Ms. DeWinter, MPAC’s representative, submits that the two best comparable properties are 1490 Lochlin Trail and 190 Maplewood Road because they have almost-identical building areas and similar lot sizes to the subject property. Ms. DeWinter calculates the time-adjusted sale values for these two properties at $576 and $578 per square foot. Ms. DeWinter submits that the current value of the Subject Property should be $2,517,000 based on the average time adjusted sale price per square feet of the two best comparable property sales of $577 applied to the Subject Property building area of 4,363 square feet.

12MPAC submits that the current value of the Subject Property, based on a 2016 valuation, should be $2,517,000 without the pool and $2,566,000 with the pool.

13The Appellant and Assessed Person, is also the Broker of Record and owner of Re/Max Specialists Estate Group Inc. He has evaluated over 2,000 homes during his 25-year career with an overall accuracy of 99% from suggested listed price to market sale value.

14The Appellant has utilized both the direct comparison approach and the cost approach in establishing the current value of the Subject Property. He introduced four proposed comparable property sales and applied a series of adjustments in order to make a direct comparison to the Subject Property. Two of the properties he has presented are also properties presented by MPAC in support of their case on current value.

15The Appellant submits that “lot area in square feet or acres” is a main element of comparability used by MPAC to select comparable properties. The Appellant believes that lot frontage is much more important than lot area or lot depth when it relates to the overall value of a property. The Appellant states that a 75 x 200 foot lot has a lesser value than a home with a 100 x 150 foot lot, yet these two lots have the same lot area. He demonstrates via a photograph of the front elevation of the Subject Property on a 75-foot lot and that of a neighboring property at 120 Pinewood Trail on a 100-foot lot. The Appellant points out that the 100-foot lot has improved curb appeal and allows the owner to build a home with a full center hall plan, adding additional value to the property as compared to the Subject Property.

16The Appellant has provided 10 sales to demonstrate how lot frontage has a significant impact on lot value. The first chart has five sales in the vicinity of the Subject Property with 75 feet to 80 feet of frontage which sold for an average value of $14,595 per front foot; and the second chart has five sales of properties between 90 and 100 feet of frontage that sold for an average value of $15,666 per front foot. The Appellant submits that the average value per front foot is $15,130 for both charts, so the comparable properties submitted by MPAC should be adjusted for each additional front foot by $15,130 in order to make a direct comparison to the Subject Property.

17Based on his experience, the Appellant has also submitted adjustments to deal with lot depth, finished basement, lot with pool, number of bedrooms, number of bathrooms, cost of building as well as a locational adjustment which he applied for comparable property sales in inferior locations that he has submitted in support of current value. The adjustments are as follows:

a) lot depth $2,000 per lineal foot b) finished basement $50,000 for properties with finished basements c) homes with pools $49,000 d) adjustment for inferior area $100,000 e) bedroom adjustment of $15,000 per bedroom f) bathroom adjustment of $7,500 per bathroom g) cost of building additional space at $265 dollars per square foot.

18The Appellant introduces the following four comparable property sales in support of current value. Of the four properties, 1490 Lochlin Trail and 190 Maplewood Road are also comparable property sales which have been submitted by MPAC.

Address	Distance from Subject- kilometers	Registration Date of Sale	Sale Amount $	Time adjusted sale value/ Assessed Value	Lot Frontage- feet	Lot Depth- feet	Square feet
111 Glenview Drive	0.65	4/29/2016	1,749,150	1,632,540	75	136	4,220
1490 Lochlin Trail	0.55	2/27/2015	2,338,000	2,436,000	90	152	4,315
1636 Trotwood Avenue	1.18	10/9/2015	1,528,000	1,535,000	67	135	3,703
190 Maplewood Road	0.46	8/6/2015	2,436,000	2,462,000	90	150	4,405

19The time adjustment factors used by the Appellant were based on the Toronto Real Estate Board year over year increase for the area showing an increase of 9.5% for 2015 and 20% for 2016.

20The Appellant applied all the applicable adjustments to each of the four comparable properties to arrive at a value directly comparable to the Subject Property. The total adjusted values for each property are as follows:

a) 111 Glenview Drive $1,859,540 b) 1490 Lochlin Trail $2,255,000 c) 1636 Trotwood Avenue $2,060,030 d) 190 Maplewood Road $2,289,050

21Based on the average of the above four sales, the Appellant submits that the current value of the Subject Property should be $2,115,917.

22The Appellant also relied on the cost approach to value claiming the cost of building his home was $297 per square foot in 2019. He applied a negative 3% adjustment per year and determined that as of January 2016, the cost to build would have been $265 per square foot. Applying this to the building area of the Subject Property, which he claims is 4,195 square feet, the cost to build would be $1,111,675. Adding the land value of $916,000 would result in a cost approach to value of $2,027,675.

23The Appellant also presents a secondary cost approach using the sale of the neighboring property at 138 Oakes Drive. This property has the same lot size as the Subject Property and was sold on November 28, 2014 for $1,025,000. Using a time adjusted factor of 10.3% would adjust the sale value to $1,130,000 based on a January 2016 valuation. The home was purchased for lot value and a new home was immediately built after the sale. Adding the 2016 building value of $1,111,675 to the value of the lot next door would result in a total value of $2,242,250 for the Subject Property.

24The Appellant then averaged the two cost approaches of $2,027,675 and $2,242,250 to arrive at a current value for the Subject Property using the cost approach of $2,134,962.

25The Appellant then averages the direct comparison approach value of $2,115,917 and the cost approach value of $2,134,962 to arrive at his final estimate of value at $2,125,439 as of the valuation day of January 1, 2016. The Appellant requests that the Board find the current value of the Subject Property to be $2,125,439 for both the 2019 and 2020 taxation years.

Findings on Issue 1

26In support of establishing a current value for the Subject Property, the Board will rely on the direct comparison approach to value advanced by both parties which is directly related to the sale of similar properties in the vicinity and therefore the best indicator of market value.

27The Board rejects the cost approach to value advanced by the Appellant in this instance. The Board typically considers this to be the approach of last resort when no market evidence is available. In this case, the Appellant has introduced four comparable property sales and MPAC has introduced three comparable sales, two of which are common to both cases.

28The Board agrees with MPAC that the best comparable properties in order to establish current value of the Subject Property are 1490 Lochlin Trail and 190 Maplewood Road. They are the most similar to the Subject Property in terms of vicinity, quality, location and building area. Even though they have slightly larger frontages, the Board considers the lots to be similar to the Subject Property for the purposes of establishing the current value of the Subject Property. These properties were also two of the four selected by the Appellant as comparable property sales in support of his determination of current value.

29The Appellant is correct that adjustments to comparable properties can be very helpful in quantitatively refining the valuation of the Subject Property to best reflect its market value. On the other hand, when those adjustments are not available or not complete, then a qualitative analysis of comparable property sales, as suggested by MPAC, can also be very useful in determining a current value range of the Subject Property. The Board prefers and selects the most comparable properties with the least possible adjustments in order to establish the current value of the Subject Property.

30The Board has therefore selected 1490 Lochlin Trail as the most similar property to the Subject Property requiring the least possible adjustments. There are no adjustments for location, pool, number of bedrooms or washrooms unlike 190 Maplewood Road which would require many of these adjustments.

31Because the Subject Property and 1490 Lochlin Trail are very similar, the Board will use the time adjusted sale value per square foot approach and then consider additional adjustments as required. The time adjusted sale value of 1490 Lochlin Trail is $576 per square foot as evidenced by MPAC. Applying this to the Subject Property’s building area of 4,363 square feet gives us a value of $2,513,088 as the current value of the Subject Property.

32Clearly the property at 1490 Lochlin Trail has 1,812 square feet of finished basement as compared to the Subject Property which has no finished basement. The only evidence that we have for the value of a finished basement is the estimate provided by the Appellant who has 25 years of experience in the Real Estate business. He has estimated $50,000 for the finished basement. MPAC, when asked by the Presiding Member to provide their estimate of value for the finished basement at 1490 Lochlin Trail, claimed that the information was not available. The Board finds that $50,000 which equates to $27.50 for quality level 8 finishes is very reasonable and therefore makes a downward adjustment to the current value of the Subject Property from $2,513,000 to $2,463,000 to compensate for the fact that the Subject Property has no finished basement.

33Both properties have pools and therefore no pool adjustment is required. Furthermore, the current value established in this decision for the Subject Property will also include the value of a pool as 1490 Lochlin Trail also has a pool.

34The Appellant has also made the case for adjustments to compensate for lot frontage and depth. Regarding frontage, he has conducted a study suggesting that $15,130 adjustment per front foot and $2,000 adjustment be made for lineal foot of depth. The $15,130 value seems very reasonable to the Board and furthermore supported by the sale of the property at 138 Oakes Drive, which was purchased for the purpose of building a new home. This property was sold for $1,025,000 on November 28, 2014, which after time adjustment by 10.3% to January 1, 2016 renders a value of $1,130,575. The value per front foot of this property located next door to the Subject Property is also $15,074, which is pretty much in line with the front foot study produced by the Appellant showing $15,130 per front foot.

35The Appellant also demonstrated the difference in the value of a 75-foot lot verses a 100-foot lot and that a much wider home with a center floor plan can be built on a 100-foot lot therefore demanding a greater market value.

36In this case, the Board is comparing the subject lot which has 75 feet of frontage by 200 feet of depth to the lot at 1490 Lochlin Trail which has 90 feet of frontage by 152 feet of depth. The Appellant suggested in his evidence that the current value of the Subject Property should be further negatively adjusted for the 15 feet difference in frontage resulting in negative adjustment to the current value of $227,000 and then a positive adjusted for the lot depth of 48 feet resulting in $96,000. The net adjustment between the two values would be a negative adjustment to the Subject Property of $131,000 for the differences between both the frontage and depth of the two lots.

37The Board has analysed the evidence with regards to lot differences between these two properties and concludes that the differences in lots is minimal when considering the difference in year built between the two properties. The Board also notes that the Appellant has provided quantitative evidence to support the front footage adjustment but has not provided any quantitative evidence to support the depth adjustment of $2,000 feet per lineal foot. For these reasons, the Board will not consider any additional adjustment for differences in lot dimensions.

38The Appellant has also failed to consider a very important adjustment for the fact that the Subject Property is newly build while the property at 140 Lochlin Trail was built in 1953 and renovated in 2009, making the Subject Property superior. The Board further concludes that the difference in lot dimensions between the two properties is more than offset by the fact that the Subject Property is a newly built home with the most up-to-date features as opposed to 1490 Lochlin Trail which is an older renovated property.

39Based on the evidence submitted by the parties, the Board finds the current value for the 2019 and 2020 taxation years to be $2,463,000 including the value of the pool.

Issue 2 – Equitable Reduction in Assessed Value

40Section 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.”

41The Assessment to Sales Ratio (“ASR”) of a sample of sold properties is a tool often 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.

42MPAC presented an equity analysis of 30 property sales of Single Family Detached, property code 301, that occurred from January 1, 2015 to December 31, 2016 located within 1.0 kilometres of the Subject Property, resulting in a median ASR of 0.969. Ms. DeWinter submits that MPAC’s standards indicate that for residential property, the median ASR should fall between 0.95 and 1.05. If the median ratio falls within this range, this reveals that the current value assessments are reflective of sales prices in the vicinity and therefore no further adjustment is required. In this case, the median ASR of 0.969 falls within the acceptable range. Therefore, MPAC recommends no further downward adjustment to the current value of the Subject Property.

43The Appellant submitted no evidence in support of an equity argument.

Findings on Issue 2

44The Board finds that based on MPAC’s equity study of 30 property sales which resulted in an ASR of 0.969, no additional downward adjustment is warranted to the current value of the Subject Property to ensure it is equitable with the assessment of similar properties in the vicinity.

Order

45The Board finds that the correct current value of the Subject Property is $2,463,000 for the section 32 appeal in the 2019 taxation year starting March 11, 2019, which reflects the date the Appellant moved into his new home. This means the Property Assessment Change Notice value is $1,547,000 ($2,463,000 - $916,000) for the 2019 taxation year. The current value for the section 40 appeal is $2,463,000 for the 2020 taxation year. Furthermore, the Board finds that no equitable reduction is required under section 44(3)(b) of the Act.

46The Board orders the reduction of the section 32 assessment value from $2,893,000 to $2,463,000 for the 2019 taxation year as of March 11, 2019, and a reduction in the section 40 assessment value from $2,582,000 to $2,463,000 for the 2020 taxation year.