Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
February 04, 2022
FILE NO.:
WR 173893
Assessed Person(s):
Natalie Ann Dmytruk; George Philp Dmytruk
Assessed Person(s):
Tony Joseph McLaughlin; Jillian Michelle Ridge
Appellant(s):
George Dmytruk
Respondent(s):
Municipal Property Assessment Corporation Region 06
Respondent(s):
Town of Bancroft
Property Location(s):
54 Nicklaus Drive
Municipality(ies):
Town of Bancroft
Roll Number(s):
1262-000-010-11032-0000
Appeal Number(s):
3384571, 3392872, 3397977 and 3440176
Taxation Year(s):
2018, 2019, 2020 and 2021
Hearing Event No.:
751964
Legislative Authority:
Sections 34 and 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
Parties
Representative
Natalie Ann Dmytruk; George Philp Dmytruk
George Dmytruk
Tony Joseph McLaughlin; Jillian Michelle Ridge
No one appeared
Municipal Property Assessment Corporation
Joe Harrington
Town of Bancroft
No one appeared
HEARD:
September 8, 2021 by telephone conference call
ADJUDICATOR(S):
Joanne Laws, Member
DECISION
OVERVIEW
1The Subject Property is located at 54 Nicklaus Drive in the Town of Bancroft.
2Effective July 1, 2018 the Municipal Property Assessment Corporation (“MPAC”) issued a supplementary assessment pursuant to s. 34 of the Assessment Act R.S.O. 1990, c. A.31 (“Act”) in the amount of $377,000 for a new residence.
3George Dmytruk, the Appellant, appealed the supplementary assessment.
4Further appeals have been deemed by the Assessment Review Board (this “Board”) in the amount of $405,000 for the 2019 taxation year and $402,000 for the 2020 and 2021 taxation years pursuant to s. 40 of the Act.
5MPAC is recommending a total assessed value of $402,000. The Appellant takes the position that the total assessed value for the lot and building should be $305,000.
Issues for the Hearing
6At issue in this proceeding is:
A determination of the current value of the subject property.
Whether an equity reduction in the current value should be made?
Result
7For the supplementary assessment effective July 1, 2018, the current value of the building portion is $270,000 in the residential property class.
8The current value of the Subject Property is $298,000 for the 2019, 2020 and 2021 taxation years.
9An equity reduction pursuant to s. 44(3)(b) is not required.
ANALYSIS
Description of Subject Property
10The Subject Property has a lot size of 0.43 acres and was improved in 2017 with a single storey detached residence measuring 2,413 square feet (“sq. ft.”). There is a crawl space below the residence but no basement. MPAC has allocated a 7 out of 10 quality of construction and is assessed by MPAC as abutting the Bancroft Ridge Golf Course, previously known as River’s Edge Golf Course.
Issue 1 – What is the current value?
11As a vacant lot the Subject Property sold for $25,000 in June 2016 and MPAC assessed it at $28,000 for the 2018 taxation year.
12A residence was built on the lot in 2017. MPAC issued a supplementary assessment notice pursuant to s. 34 of the Act assessing the residence at $377,000 with an effective date of July 1, 2018.
13Effective January 1, 2019 the lot and residence were assessed at $405,000. After an inspection of the Subject Property and speaking to the Appellant, MPAC made changes to its data for the size of the lot and amended the building’s below ground area from a basement to a crawl space. The adjustments resulted in a value of $402,000 for the 2020 and 2021 taxation years. MPAC is recommending a value of $402,000 for the 2019, 2020 and 2021 taxation years. MPAC stated that the values of $405,000 and $402,000 include an 11% downward “market” adjustment.
14MPAC has assessed the Subject Property as abutting a golf course and argued it is similar to other properties abutting golf courses. There is no dispute that only 15 feet of the Subject Property’s perimeter abuts the golf course. That 15 feet is located on the Subject Property’s rear 100-foot border. Further, there is no dispute that the remaining 85 feet abut a residential lot that sits between the Subject Property and the golf course. At the time of this hearing that lot had not been developed but was used for storage. MPAC argued that until that lot is developed the Subject Property has an unobstructed view of the golf course and, therefore, is comparable to properties that fully abut a golf course. The Appellant disagreed with MPAC arguing that 15 out of 100 feet does not make the Subject Property comparable to a property that fully abuts a golf course and that such properties would have higher market values than the Subject Property, all other aspects being equal. He argued that whether or not the abutting lot is developed does not change the fact that 85 of 100 feet do not abut the golf course and, therefore, will always have an impact on the Subject Property’s value in the marketplace. The Board agrees with the Appellant’s position and will take this factor into consideration in its analysis of the sale properties.
15The Appellant raised concerns regarding the effect COVID-19 has had on current property values as well as the possible negative effects due to nearby property developments or because the golf course has changed ownership, decreased in value or may cease operation in the future. The Board is unable to consider issues that have not occurred or where quantitative evidence as to the impact on the current value was not provided.
16To support a current value of $402,000 MPAC presented eight properties with sales, applying time adjustments to estimate each sale value as of the January 1, 2016 valuation date. MPAC stated the eight properties are located near the Subject Property. Each of the resulting time-adjusted sale values were divided by the building’s area, resulting in a time-adjusted sale price per square foot of building area. MPAC stated the median time-adjusted sale price per square foot of building area for the eight properties was $177 and the average was $169, concluding that, based on its recommended value $402,000 the Subject Property’s value of $167 per square foot is reasonable ($402,000/2,413 sq. ft.).
17The Appellant addressed how each of MPAC’s sales compared to the Subject Property. Both MPAC’s and the Appellant’s evidence and arguments are included in the Board’s sales analysis below. Generally, the Appellant argued that MPAC’s sales are not indicators of the Subject Property’s current value because they are located outside and farther away from Subject Property and its neighbourhood and have different types of construction. It is reasonable that properties located closer to the Subject Property may better reflect its current value.
18MPAC’s Sales 1 and 2, 72 Gabel Road, sold in 2012 and again in 2016. It is located 3.6 kilometres (“km”) from the Subject Property, the building is older (2009 versus 2017) and smaller (1,713 sq. ft. versus the Subject Property’s 2,413 sq. ft.). However, it has a significantly larger lot (2.23 acres versus 0.43 acres), an additional bathroom and a finished walk-out basement. On balance, it is similar to the Subject Property. The second sale, which is closest to the valuation date, has a time-adjusted sale price of $333,000, rounded.
19MPAC’s Sale 3, 180 Bridge Street West, is located 2.51 km from the Subject Property. It is inferior to the Subject Property with a smaller lot size (0.35 acres), older building (1971) and the main floor building size is smaller (1,864 sq. ft.). Its superior characteristic is a finished basement. It has a pool and abuts a school but there is no evidence whether either negatively or positively affects the property’s value. On balance, it is inferior to the Subject Property. MPAC’s time-adjusted sale price is $265,000, rounded.
20MPAC’s Sale 4, 39 Golfview Drive, is located 1.64 km from the Subject Property. It has a larger lot (1.25 acres) but the building is older (2001) and smaller (2,115 sq. ft.) but has a full basement. MPAC has allocated a lower quality of construction (6.5 versus the Subject Property’s 7.0). The Appellant argued that it is superior to the Subject Property because one side of the property fully abuts the golf course with an unobstructed view. Considering all of the characteristics of this property compared to the Subject Property, it is, on balance, superior to the Subject Property in terms of its lot size, that it has a basement and one side fully abuts the golf course. MPAC’s time-adjusted sale price is $274,000 rounded.
21MPAC’s Sale 5, 15 Williams Drive, is located 3.54 km from the Subject Property. The building is older (2009) and smaller (1,517 sq. ft.) with a lower quality of construction (6.5). The lot size is similar (0.41 acres) and it has a full basement. MPAC’s data is that it abuts a school. It is, on balance, inferior to the Subject Property having only one characteristic, the basement, that is superior. MPAC’s time-adjusted sale price is $248,000, rounded.
22MPAC’s Sale 6, 41 John Street, is located 3.72 km from the Subject Property. It has a larger lot (1.25 acres), the building is significantly older (1979) and is slightly smaller (2,038 sq. ft.) with a lower quality of construction (6.0). Despite having a basement, it is, on balance, inferior to the Subject Property. MPAC’s time-adjusted sale value is $279,000, rounded.
23MPAC’s Sale 7, 16 Airview Drive, is located 1.03 km from the Subject Property. The building is older (1992) and smaller (1,456 sq. ft.) but it has a larger lot (1.15 acres) and a finished basement. The Appellant argued that it is superior to the Subject Property because it has a private lake, the benefit of which is reflected in the assessed value of $295,000. MPAC’s time-adjusted sale value is $277,000 rounded. The lake, along with the lot size and finished basement, are superior characteristics. Balancing the negative and positive characteristics, this property is similar to the Subject Property. MPAC’s time-adjusted sale price is $277,000, rounded.
24MPAC’s Sale 8, 42 Vanluven Lane is located 1.41 km from the Subject Property. It has a larger lot (1.25 acres) and a full basement. The building is smaller (1,482 sq. ft.) and older (2009) but has the same quality of construction (7). On balance, it is similar to the Subject Property. MPAC’s time-adjusted sale price is $284,000, rounded.
25The Appellant presented one sale, 40 Nicklaus Drive. The Appellant’s evidence was that it sold for $190,000 in the summer of 2016 with a closing date in November 2016 and that it is smaller than the Subject Property. The Appellant argued that, based on its location, which is very near the Subject Property and on the same side of the same street, it is a better indication of the Subject Property’s current value than MPAC’s sale properties which are located farther away. The Appellant noted that MPAC had identified which of its eight sales were inferior to the Subject Property and that all of MPAC’s eight sales have smaller above-ground building areas than the Subject Property. When asked why he did not include this property in his Valuation Report, MPAC’s representative, Joe Harrington, who authored the Valuation Report and selected the sale properties, responded that the November 2016 sale date was too far from the January 1, 2016 valuation date. Later in the hearing he stated that 40 Nicklaus Drive was also inferior to the Subject Property. Regardless, the Board cannot consider 40 Nickolas Drive for the purpose of determining the Subject Property’s current value because there is insufficient data, including lot size, building size, age of building and basement area, to make a meaningful comparison between the two properties.
Findings on Issue 1
26Section 1(1) of the Act defines current value as: “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.” Section 19.2(1)4. provides that the valuation date for the taxation years subject to the appeals is January 1, 2016.
27The Board’s concern is deciding the correctness of the assessment in relation to sales, where available, rather than whether MPAC’s model is correct or makes sense. (Cogan v Municipal Property Assessment Corporation, Region No 3, [unreported] DM 32084).
28In order to determine the current value of the Subject Property as of the January 1, 2016 valuation date the best evidence is an arm’s length sale of the Subject Property close to the valuation date. If such a sale did not occur, the next best evidence is open market sales of similar properties that sold close to the valuation date.
29MPAC noted that there was a building permit taken out in 2017 in the amount of $345,000. The Board does not consider a building permit or the cost to build a property reliable in determination a property’s current value as defined in s. 1 of the Act.
30MPAC relied on a value per square foot analysis for its eight sales. Generally, this is not a reliable method of determining a property’s current value unless the suggested comparable properties are very similar if not identical to the Subject Property. This is not the case here. As a result, the Board will use the bracketing method, the scheme of which is that superior properties will sell for more than the Subject Property, inferior will sell for less and similar properties are good indicators of current value.
31Based on the Board’s analysis of the sale properties and using the bracketing method, the current value of the Subject Property is $298,000 which is the average of the time-adjusted sale values for the three similar properties: 72 Gabel Road at $333,000, 16 Airview Drive at $277,000 and 42 Vanluven Lane at $284,000.
Issue 2 - Does the current value determined require a reduction for it to be an equitable assessment when reference is made to the assessments of similar properties in the vicinity?
32The Appellant argued that the Subject Property is not assessed equitably in relation to other properties in its vicinity, particularly that superior and similar properties are assessed below the Subject Property’s assessment.
33In support of an equitable assessment the Appellant presented data and photographs of six properties: 32, 52 and 48 Nicklaus Drive, 27 and 34 Waterhouse Crescent and 50 Ridge Road. When comparing property assessments to determine whether an equitable reduction is warranted, rather than a study that compares assessment to sales, they must be directly comparable to the Subject Property. This is not the case here.
34All six properties are located near the Subject Property, however, the properties located on Waterhouse Crescent and Ridge Road are significantly older (1988 to 1990) than the Subject Property (2017). The ages would likely result in a greater depreciation resulting in lower assessments. The differences in ages makes these properties too dissimilar from the Subject Property to assist in an equitable analysis.
35The remaining three properties are all located on the same street as the Subject Property and have the same lot size and number of bathrooms. However, there are differences between them and the Subject Property:
a. 32 Nicklaus Drive is built on a concrete slab and, therefore, has no below grade space. It is 11 years older than the Subject Property and the building is slightly smaller at 2,120 sq. ft. compared to the Subject Property with 2,413 sq. ft.
b. 52 Nicklaus Drive does not have a crawl space but a basement with a six-foot ceiling height, the building is ten years older than the Subject Property and the building is smaller at 1,695 sq. ft.
c. 48 Nicklaus Drive was built in 2006 but sat vacant until 2012. Despite it being vacant, the building’s age is 2006 and, therefore, older than the Subject Property. The building size is smaller with 1,597 sq. ft. and it has a full basement measuring 1,678 sq. ft.
36MPAC produced an equity report using a ratio study of the assessments to the time-adjusted sale values. The sample size of 30 properties were single-family, single storey detached residences, with building sizes in the range of 1,200 to 2,500 sq. ft., located within 10 kilometres of the Subject Property, with quality ratings of 6.0 to 7.0, and, with sale dates between January 2012 and December 2016. The median assessment to sale ratio was 0.977. MPAC takes the position that an assessment to sale ratio falling between 0.95 and 1.05 is acceptable and therefore, 0.977 indicates that MPAC is assessing properties in the vicinity at or near their current values.
Findings on Issue 2
37Section 44(3)(b) of the Act requires the Board to have reference to the assessments of similar lands in the vicinity to determine whether a reduction in the current value as determined is necessary for an equitable assessment.
38In support of his argument that the Subject Property is inequitably assessed, the Appellant provided the assessments of six properties located near the Subject Property. When comparing individual properties to the Subject Property for a determination of an equitable assessment, the properties must be very similar if not identical to the Subject Property to determine whether an equitable reduction of the assessment is warranted. For example, this method would be appropriate where the units are the same model in the same development, such as townhouses or a stacked building, and where the differences are slight, such as the view. Although there are some similarities among the properties presented by the Appellant, there are too many differences for the purpose of determining whether the Subject Property is inequitably assessed.
39The best evidence received is MPAC’s equity study which compares MPAC’s assessments against sale values. The points of comparison are numerous and the sample size of 30 properties is adequate. The resulting median assessment to sale ratio of 0.977 indicates the MPAC is tending to assess properties in the vicinity of the Subject Property near their current values. As such, an adjustment to the Subject Property’s current value is not required to achieve an equitable assessment.
CONCLUSION
40The current value of the lot and building as determined above is $298,000. Deducting the lot’s 2018 assessed value of $28,000 results in a value of $270,000. This is the building’s current value effective July 1, 2018.
ORDER
41The Board orders that the assessed value effective July 1, 2018 and for the 2019, 2020 and 2021 taxation years is $298,000 in the residential property class:
Appeal no. 3384571: the supplementary assessment in the residential property class, with an effective date of July 1, 2018, is reduced from $377,000 to $270,000 in the residential property class.
Appeal no. 3392872: the current value, in the residential property class with an effective date of January 1, 2019, is reduced from $405,000 to $298,000 in the residential property class.
Appeal nos. 3397977 and 3440176: the current value in the residential property class, with effective dates of January 1, 2020 and January 1, 2021, respectively, are reduced from $402,000 to $298,000 in the residential property class.