Tribunals Ontario
Assessment Review Board
ISSUE DATE: July 05, 2022
FILE NO.: WR 179992
Assessed Person(s): A.R. and A.S.
Applicant(s): A.R. and A.S.
Respondent(s): City of Toronto
Property Location(s): Address Withheld
Municipality(ies): City of Toronto
Roll Number(s): Roll Number Withheld
Appeal Number(s): 3450956
Taxation Year(s): 2021
Hearing Event No.: 770165
Legislative Authority: Section 323(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A
APPEARANCES:
| Parties | Counsel/Representative* |
|---|---|
| A.R. and A.S. | Self-represented |
| City of Toronto | Graham Thomson |
HEARD: June 21, 2022 by telephone conference call
ADJUDICATOR(S): Margarita Okhovati, Member
DECISION
OVERVIEW
1A.R. and A.S. (“the Applicants”) filed an application to the City of Toronto (“City”) to have their 2021 property taxes cancelled, reduced or refunded because they were unable to pay, due either to sickness or extreme poverty, under s. 323 (11) of the City of Toronto Act (the “Act”).
2The City has passed a by-law delegating its authority to determine such applications to the Assessment Review Board (the “Board”).
Issues for the Hearing
3The main issue before the Board is whether the Applicants’ 2021 property taxes should be cancelled, reduced or refunded due to their inability to pay because of sickness or extreme poverty. This requires the Board to determine:
- if the Applicants were unable to pay their 2021 property taxes; and
- if the Board determines they were unable to pay their property taxes, the Board must then determine if the reason they were unable to pay was either sickness or extreme poverty.
4Finally, if the Board determines that they were unable to pay because of sickness or extreme poverty, the Board must then decide on the amount of the property taxes levied in 2021 to be cancelled, reduced or refunded.
Result
5The Board finds that the Applicants failed to demonstrate that they were unable to pay the property taxes levied in 2021. The application is dismissed.
ANALYSIS
Issue 1 – Were the Applicants able to pay the property taxes levied in 2021?
6A.S. testified on behalf of the family in this case. She stated that in 2021, she lived with her husband and three children (ages, 21, 16 and 15) in the subject property.
7She testified that the family had income in the amount of $5,843.51 per month in 2021. The total was comprised of Ontario Works/ODSP, child tax benefits and cash deposits in their accounts. The Applicant stated that a part of the cash deposits was from her husband’s private business but the multiple cash deposits in the accounts were money borrowed from relatives and friends with no written agreements or receipts. The Applicant did not remember where the rest of the cash deposits came from.
8The household income and expenses were managed through six different bank accounts held by the Applicants. The balance in those accounts as of December 31, 2021 was approximately $9,572.
9Monthly household expenses reported by the Applicants in the Financial Information Form for 2021 totaled approximately to $2,522.04. However, most of the numbers had to be adjusted based on the documentary evidence.
10Monthly expenses of the Applicants are summarized as follows:
- Mortgage: $402.85
- Property taxes: $151.36
- Home and car insurance: $133.97
- Water: $ 150
- Hydro: $ 76.76
- House telephone: $ 2.92
- Cable, internet and A.R.’s cell phone: $ 52.40
- 3 other cell phones: $ 45.00
- Groceries: $ 700
- Household supplies: $ 200
- Loan: $ 156.78
- Meals outside: $ 50
- Gas and car repair: $ 300
- Clothing: $ 100
Income Total: $5,843.51 Expenses Total: $2,522.04 Net Total $3,321.47
11Documents in evidence indicate that the Applicants have financial liabilities in the form of owing on the mortgage for $183,646.17, line of credit debt for the amount of $32,978.68, bank debts for $1,364.22 and outstanding property taxes for $2,127.35. These debts totaled approximately to $220,116.42.
12The Applicant believed that the fair market value of the subject property would be approximately $1,000,000 and when total liabilities are considered, the equity in the subject property amounts approximately to $800,000, which could have been leveraged to pay the property taxes. In addition, the Applicant testified that they have $4,051 in the Registered Education Savings Plan (“RESP”) for the children and agreed that based on the documentary evidence, as of December 31, 2021, the balance on the family bank accounts was $9,572.
13The City’s position is to dismiss the application for the Applicants were able to pay their 2021 property taxes after considering the funds available to them in 2021 and despite the significant expenses incurred by the Applicants and their children for eating outside, food deliveries, numerous online shopping for clothing, perfume, cosmetics, jewellery, videos, sports equipment, gifts, charity donations, etc. In the City’s view, this does not reflect the finances of persons who are unable to pay the property taxes.
Findings on Issue 1- Ability to Pay
14The Board notes that the Applicants’ outstanding taxes for 2021 is $ 2,127.35 and the monthly net total income after their monthly expenses is $3,321.47. Even if, we do not consider the other funds available to the Applicants and the equity on their property, it is clear evidence that they could have used this money to pay their 2021 taxes.
15Furthermore, in the Board’s view, discretionary spending on non-essential matters, as mentioned above, indicates that the Applicants had an ability to pay their monthly property taxes. The Board determined, in M. M. U. v Toronto (City), 2015 CanLII 46826 (ON ARB), that discretionary expenses must not take precedence over the payment of property taxes.
16Therefore, it is the Board’s finding that the Applicants were able to pay their 2021 property taxes without cutting from the necessities of life and that they are not in a negative situation when it comes to poverty.
17Having decided that the Applicants were able to pay the property taxes in 2021, the Board has no reason to consider whether the Applicants are in a condition of sickness or extreme poverty.
ORDER
18The Board orders that the application is dismissed.
"Margarita Okhovati"
MARGARITA OKHOVATI MEMBER Assessment Review Board Website: www.tribunalsontario.ca/arb