Tribunals Ontario

Assessment Review Board

ISSUE DATE: May 05, 2021

FILE NO.: WR 169546

Assessed Person(s): Manoj Kumar Arora and Taruna Arora

Appellant(s): Manoj Arora and Taruna Arora

Respondent(s): Municipal Property Assessment Corporation Region 14

Respondent(s): City of Vaughan

Property Location(s): 11350 Pine Valley Drive

Municipality(ies): City of Vaughan

Roll Number(s): 1928-000-312-18000-0000

Appeal Number(s): 3419727 and 3444139

Taxation Year(s): 2020 and 2021

Hearing Event No.: 742380

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

APPEARANCES:

Parties	Representative
Manoj Arora and Taruna Arora	Self-represented
Municipal Property Assessment Corporation	Leo Verduci
City of Vaughan	No one appeared

HEARD: March 24, 2021 by telephone conference call

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1Manoj Arora and Taruna Arora, (the “Appellants”), owners of 11350 Pine Valley Drive (the “Subject Property”), appealed the 2020 assessment of the Subject Property to the Assessment Review Board (the “Board”) under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on the ground that the assessment is too high.

2The Appellants argued that the current value assessment (“CVA”) of the Subject Property should be $1,459,980. Pursuant to s. 40(26) of the Act, the Appellants are deemed to have brought the same appeal in respect of the 2021 taxation year.

3The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $2,144,000 for the 2020 taxation year. MPAC submitted that its opinion of value is $2,299,000 based on market sales analysis, however, it is not seeking an increase in the assessment of the Subject Property and requests that the Board confirms the assessment as returned at $2,144,000.

4At the completion of the hearing, the Board reserved its Decision.

Issues for the Hearing

5The issues to be determined are:

1. What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?
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?

Result

6The Board finds that the correct current value of the Subject Property is $2,144,000 for the 2020 and 2021 taxation years.

7The Board finds that there should be no adjustment in the determined current value in order to make it equitable with the assessment of similar properties in the vicinity.

ANALYSIS

Description of the Subject Property

8The Subject Property is a one-storey, single-family detached dwelling built in 2006 located in the City of Vaughan. It has an actual site area of 1.43 acres. Its’ total building area is 3,660 square feet (“sq. ft.”), with construction quality of 8.5. It has a basement area of 3,768 sq. ft. of which 3,391 sq. ft. is finished. It also has two attached garages and a shed.

Issue 1 - What is the correct current value of the Subject Property for the 2020 and 2021 taxation years?

9In accordance with s. 44(3)(a) of the Act, the first mandate of 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 2020 and 2021 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.

10The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation date or close to it or 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.

11The Board finds the current value of the Subject Property for the 2020 and 2021 taxation years to be $2,299,000 (rounded).

MPAC’s Proposed Comparable Properties

12MPAC presented the Board with two proposed comparable property sales. The details of MPAC’s property sales are provided in Table 1 below.

Table 1

Address	Assessment ($)	Sale Date & Sale Amt. ($)	Time/ Adjusted Sale ($)	Building/ Size (sq. ft.)	Lot Size (Acres)	Year Built/ # of floors	Quality of Construction
Subject Property 11350 Pine Valley Dr.	2,144,000	N/A	N/A	3,660	1.43	2006/ one storey	8.5
Sale 1 331 Stephanie Blvd.	2,311,000	December 2015 (2,330,000)	2,349,245	3,718	1.04	1989/ one storey	9.0
Sale 2 252 Millwood Pky.	1,958,000	August 2015 (2,084,000)	2,249,884	3,592	1.14	1987/ one storey	8.0

13The Board finds that these comparable property sales are similar to the Subject Property. The building and land sizes are within a reasonable range of the Subject Property’s building total area and land size. Comparable property Sale 1 has a smaller site area of 1.04, its building total area is 58 sq. ft. bigger than the Subject Property. It has only one garage and a smaller basement area. The quality of construction of this property at 9.0, offsets the age of the building, which is 17 years older than the Subject Property.

14Comparable property Sale 2 has an outdoor pool and a cabin. These features are accounted for in its smaller building area of 3,592 sq. ft., smaller site area of 1.14 acres, age, unfinished basement and a lower quality of construction of 8.0.

Appellants’ Proposed Comparable Property Sales

15The Appellants presented the assessment of five properties and argued that these properties are superior to the Subject Property but have lower assessed values. The Appellants submitted that the total increase on the Subject Property for four years from 2017 to January 2020 is $706,000, when compared to the 2012 cycle, which was an increase of $98,000. The Appellants argued that compared to the properties in their immediate neighbourhood, they have been assessed unfairly.

16The Board did not review three of the Appellants’ proposed comparable property sale, since there was no sale of these properties. Two of the assessed properties presented by the Appellants: 10350 Pine Valley Drive and 4915 Kirby Road, both sold nine months from the valuation date of January 1, 2016. The Appellants used the assessed value per square foot of 10350 Pine Valley Drive, assessed at $2,134,000, and obtained $405.55 assessment per square foot and applied it against the building total area of the Subject Property of 3,660 sq. ft. for a value of $1,459,980. The Appellants submitted that $1,459,980 should be the current value of the Subject Property.

17The Board finds that the Appellants proposed comparable property sales are not comparable to the Subject Property and they used the incorrect methodology in arriving at the current value of the Subject Property.

18Although 10350 Pine Valley Drive is located on the same street as the Subject Property, it is not comparable to the Subject Property. This property has a building total area of 5,262 sq. ft., with construction quality of 7.5, built in 1996, with a site area of 1.9 acres, it sold in September 2016 for $2,710,000 for a time adjusted sale price of $2,379,380. The time adjusted sale price per square foot is $452.18. This amount is low due to economies of scale, which is a principle recognized in the marketplace that the sales value of properties will reflect a lesser value per square foot as the building size increases. The two proposed comparable property sales presented by MPAC both have building total areas of 3,718 sq. ft. and 3,592 sq. ft. which is within the 10% range of the Subject Property’s building total area of 3,660 sq. ft. The time adjusted sale price per square foot for these two sales are: $631.85 and $626.35 per sq. ft., compared to 10350 Pine Valley Drive, which has a lower time adjusted sale price per square foot of $452.18, with a larger building total area of 5,262 sq. ft., which is 1,602 sq. ft. larger than the Subject Property. Consequently, the Board did not use this sale to determine the current value of the Subject Property.

19The Appellants other proposed comparable property sale, 4915 Kirby Road, which sold September 2016, is also not comparable with the Subject Property. Its lot size of 7.31 acres is larger than the Subject Property’s lot size of 1.43 and its building size of 4,025 sq. ft. is 365 sq. ft. larger than the Subject Property. Furthermore, this property is a two-storey structure, which is different from the one-storey structure of the Subject Property.

20In addition, the Appellants methodology of arriving at the current value of the Subject Property is not reliable since they did not rely on market sales. Where an assessed value is used rather than market sales to determine current value, the result may be an incorrect current value pursuant to the definition of current value in the Act.

Finding on Current Value

21To determine the correct current value of the Subject Property, the Board used MPAC’s two proposed comparable property sales, as it has determined that these two comparable property sales are similar to the Subject Property. Using the average of the time adjusted sale prices of these sales; $2,349,245 and $2,249,884 provides a value of $2,299,564.50. The Board finds the current value of the Subject Property to be $2,299,000 (rounded) for the 2020 and 2021 taxation years.

Issue 2 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) 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.

22Section 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.

23The 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 TAS price.

24The Board finds that similar properties have been assessed at or near their current value, therefore an equity adjustment is not necessary.

25MPAC presented an equity analysis of 30 residential sales of single-family detached homes from January 1, 2015 to December 31, 2016 within 2.83 kilometers of the Subject Property. MPAC submitted that the median ASR is 0.984. MPAC added that the International Association of Assessing Officers standards states that the median ratio should fall between 0.90 and 1.10. MPAC’s standard is 0.95 to 1.05 and this indicates that similar real property in the vicinity have been assessed at or near their current value. Therefore, no equity adjustment is required to MPAC’s opinion of value of $2,299,000.

26The Appellants provided five properties and submitted that although these properties are superior to the Subject Property, their assessments are lower than the Subject Property.

27MPAC provided a more representative sample size, which is preferred and will provide a general level of assessment of similar lands in the vicinity. The Board notes that MPAC used two of the Appellants properties that sold in 2016 as part of its equity analysis. The application of equity is remedial in nature. Where the Board is of the view that applying the determined correct current value will result in unfairness if the Subject Property is bearing a corresponding tax burden based on its current value and all other similar properties are not. In order to correct this, in accordance with s. 44 (3)(b) of the Act, the Board has to make a determination that there is unfairness, that the assessment of the Subject Property at its current value creates inequity.

28The Board included MPAC’s proposed comparable property Sale 2, (252 Millwood Pky), which MPAC used in making submissions on the current value of the Subject Property to MPAC’s equity analysis. This property has an ASR of 0.870. The Board finds that the median ASR is still 0.984. Therefore, the Board agrees with MPAC that a median ASR of 0.984, reveals that similar properties in the vicinity have been assessed at or near their current value, therefore an equity adjustment is not necessary.

29The Board finds that the correct current value of the Subject Property is $2,299,000 with no equitable adjustment.

CONCLUSION

30Although the evidence adduced indicates that the correct current value of the Subject Property could be as high as $2,299,000, MPAC has not served a Notice of Higher Assessment, and adopts the position that the correct current value is MPAC's assessed value of $2,144,000. As this value is supported by the evidence adduced at this hearing, the Board finds that the correct current value is $2,144,000 for the 2020 and 2021 taxation years.