Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
December 07, 2023
WR 185599
Assessed Person(s):
J.B.
Applicant(s):
J.B.
Respondent(s):
City of Toronto
Property Location(s):
Address Withheld
Municipality(ies):
City of Toronto
Roll Number(s):
Roll Number Withheld
Appeal Number(s):
3516218
Taxation Year(s):
2022
Hearing Event No.:
782575
Legislative Authority:
Section 323(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A
APPEARANCES:
Parties
Counsel*/Representative
J.B.
Self-represented
City of Toronto
Amy Tieu*
HEARD:
November 27, 2023 by telephone conference call
ADJUDICATOR(S):
Subuola Awoleri, Member
OVERVIEW
1J.B. (the “Applicant”) filed an application to the City of Toronto (the “City”) to have his 2022 property taxes reduced, cancelled or refunded because he was unable to pay these taxes due to either sickness or extreme poverty under Section 323(1)(e) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A.
2The City passed a by-law delegating its authority to determine such applications to the Assessment Review Board (the “Board”).
Background
3The Applicant is a post-secondary student.
4He owns two investment properties in Toronto, including the Subject Property. He received rental income from these properties. In 2022, the Applicant was not residing in the Subject Property. He lived with his father for most of the year.
5The Applicant had issues with rogue tenants residing in the Subject Property. The tenants did not pay rent from August 2022 to April 2023, which the Applicant claimed had a huge financial impact on him.
6The total property taxes levied on the Subject Property in 2022 was $5,895.94. The Applicant paid $3,960.73. The balance due in his property tax account was $2,347.73 including interest in the amount of $412.04. The Applicant is requesting relief for cancellation of $1,935.69, (excluding interest) due to extreme poverty.
Issues for the Hearing
7The issue to be determined is if the Applicant’s 2022 property taxes should be cancelled, reduced or refunded as a result of the Applicant’s inability to pay due to sickness or extreme poverty. This requires the Board to determine:
a. if the Applicant was unable to pay his property taxes;
b. if the Board finds that he was unable to pay his property taxes, the Board must determine if the inability to pay was due to either sickness or extreme poverty; and
c. if the Board determines that he was unable to pay due to sickness or extreme poverty, the Board must then decide on the amount of the property taxes levied in 2022 to be cancelled, reduced or refunded.
Result
8The Board finds that the Applicant was able to pay the property taxes levied on the Subject Property in 2022, and therefore dismisses this application.
ANALYSIS
Issue 1 – Was the Applicant able to pay his property taxes in 2022?
9A determination by the Board of the Applicant’s ability to pay his property taxes requires a contextual analysis of not only the Applicant’s income and expenses, but an examination of all financial resources available to the Applicant.
Income
10In 2022, the Applicant had the following four sources of income: a short-term employment as a lecturer, university bursary, family support and rental income.
11The Applicant’s documentary disclosure served on the City and filed with the Board, included a financial information form. In this form, the Applicant included financial support from his family as part of his monthly income, specifically his father, brother and wife. From the Applicant’s documentary disclosure, the City calculated the monthly support from his family to be $8,037.08.
12The Applicant submitted that the contribution from his family should not be included as income, but a loan. During cross-examination, the Applicant admitted that although he is expected to re-pay his father, his father understands his financial situation, but he must re-pay his wife. Apart from his testimony, the Applicant did not present any documentary evidence to prove that the numerous money transfers to him by his family were loans. Consequently, the Board finds that for the purpose of this type of Application, these were additional financial resources available to the Applicant and deems it as part of his income. See A.E. v Toronto (City), 2023 CanLII 97688 (ON ARB) at paras. 7 and 8.
13Therefore, the Applicant’s total monthly income in 2022 was $13,813.62.
Expenses
14Most of the Applicant’s expenses were expended towards maintaining his investment properties.
15The Applicant’s undisputed monthly expenses in 2022 was $12,627.03. When subtracting the total monthly income from the monthly expenses, the net income is $1,186.59.
16The Applicant’s monthly income and expenses are summarized in Table 1 below:
Table 1
Amount ($)
Income
13,813.62
Expenses
Mortgage
7,606.49
Property taxes
1,056.36
Home Insurance
294.01
Water
200.00
Heat
647.13
Hydro
587.16
Cell phone (Applicant & Wife)
130.45
Internet
102.69
Groceries
500.00
Household supplies
600.00
Transit/TTC
8.33
Meals outside the home
100.00
Interest of Credit Cards and Line of Credit
270.27
Loans
14.17
Clothing
150.00
Recreation/Entertainment
60.00
Vacation
200.00
Baby related expenses
100.00
Total Monthly Expenses
12,627.06
Net Income
1,186.56
Assets and Liabilities
17The Applicant testified that the estimated market value of the Subject Property is $1,850,000. However, he added that due to the condition of the Subject Property, it would not sell for this amount. He testified that a retaining wall that collapsed in the Subject Property also affected its landscape, and the repairs were capital intensive.
18The Applicant further testified that the market value of his second investment property is $1,700,000. He added that this property would also not sell for this value due to the deteriorating condition of the basement.
19The current value assessment of the Subject Property provided by the Municipal Property Assessment Corporation as of the valuation day, January 1, 2016, is $933,000. Barry Henuat, the City’s witness, testified that the market value of the Subject Property is $1,650,000, based on recent sales of properties within the vicinity. However, Mr. Henaut added that this value does not account for the issues with the retaining wall and rogue tenants.
20The Applicant presented an invoice dated May 19, 2022, that revealed the amount he paid for repairs on the Subject Property. The total amount paid was $42,940,00. Therefore, the Board will deduct this amount from the market value of $1,650,000 provided by the City which results in a market value of $1,607,060 for the Subject Property.
21The Applicant did not provide any cost to cure the defects in the basement of his second investment property, therefore based on the Applicant’s testimony the market value is $1,700,000.
22The Board finds that the total asset of the Applicant was $3,370,567.04 and the total undisputed liability of the Applicant was $1,476,712.39. Subtracting this amount from the total asset of $3,370,567.04 provides a net worth of $1,893,854.65.
23The Applicant’s assets and liabilities in 2022 are summarized in Table 2 below:
Table 2
Assets
Amount ($)
Subject Property’s market value
1,607,060
Investment Property
1,700,000
Term Deposit
47,854.91
Landlord and Tenant Board’s order on Rent
13,151.96
Cash in Bank accounts
2,500.17
Total Asset
3,370,567.04
Liabilities
Mortgage Subject Property
730,823.53
Mortgage Investment Property
713,715.08
Credit card
18,073.78
Student Loan
8,000
Rent deposit
6,100
Total Liabilities
1,476,712.39
Net Asset (Total Assets Less Liabilities)
1,893,854.65
24The City requested that the Board dismiss the Applicant’s application. The City submitted that the Applicant has not met the test to qualify for relief. The City added that based on the Applicant’s evidence, specifically his assets and income, discretionary expenses and equity in the two investment properties, the Applicant is not in dire need and has demonstrated that he could fully pay the total property taxes levied on the Subject Property.
Findings on Issue 1
25The Board finds that the Applicant was able to pay the property taxes levied on the Subject Property in 2022 and therefore does not qualify for relief.
26The Applicant’s monthly bank account statements shows numerous unexplained deposits. The following deposits were made: February 25 - $3,000, April 5 - $4,200, May 18 - $2,060.63, June 20 - $3,000, September 21- $991.02 and $600. The total of these deposits was $13,851.65.
27There were also some withdrawals from the Applicant’s bank account in the form of email-transfers. During cross-examination, the Applicant could not explain what he used the money for. These include the following e-transfers: September 16 - $400, September 22 - $500, August 2 - $1,000, the total e-transfers were $1,900.
28These un-explained deposits and e-transfers could have been used to pay the balance of $1,935.69 in the Applicant’s property tax account. This is in addition to the Applicant’s net income in the amount of $1,186.59.
29The Applicant also had numerous discretionary expenses. The City provided an extensive list of these discretionary expenses in its submissions. The Board would mention a few: legal fees - $3,968, gift for wife - $955.72, gift for cousin - $225.99, subscription gift for friend - $96.00, payment for Spotify - $62.04, payment for audible - $172.70, campground membership fee - $86.32, eBay payment, that Applicant could not recall what was purchased - $495.62, purchase of two bicycles - $4,668.72, driving lessons - $830.55, Expedia (for hotel accommodation for a conference) - $626.39 etc. The total of these discretionary expenses is $12,188.05. The Applicant could have used part of this amount to pay the balance of his property taxes. Discretionary expenses must not take precedence over property taxes. See A.P. v. Toronto (City), 2018 CanLII 70339 (ON ARB), at para. 26.
30The Applicant also had substantial equity in the Subject Property which he could have leveraged to pay his property taxes. He testified that he had approached some financial institutions to obtain a line of credit, but he was denied due to his debt. The Applicant could have also leveraged on the equity in his second investment property to pay his property taxes. However, he did not need to utilize the equity in these properties, as a review of his income and expenses reveal that he had the ability to pay all the property taxes levied on the Subject Property in 2022. In E. B. v. Toronto (City), 2016 CanLII 45380 (ON ARB) at paras. 19 and 20 the Board held that:
…These applications are of last resort and the Applicant must have depleted all resources before making such an application.
The Applicant must demonstrate in her applications, that after managing her resources and expenditures, she has no further resources to meet the basic necessities of life in addition to paying all or some of her property taxes. The Board agrees with the City that there is substantial equity in the subject property and the Applicant should have leveraged on this in order to minimize the tax burden.
31Furthermore, in M. M. U. v Toronto (City), 2015 CanLII 46826 (ON ARB) at para. 21 the Board held that:
In order to qualify under this section of the Act, the Applicant is required to show that every reasonable effort has been made to pay all or part of the taxes. There is an expectation that to qualify for relief under this section of the Act the condition cannot be one where an individual simply cannot make ends meet but amounts to a situation where the Applicant after having called upon every resource available to him and having applied every reasonable means to mitigate and manage his expenditures is left with no means of being able to pay some or all of their property taxes.
32The Applicant could have called upon every financial resource available to him, to pay his property taxes. He was able to pay for the basic necessities of life, including discretionary expenses. The Applicant went on vacation, which cost approximately $2,400. He testified that this was a field work for his education. He also paid $3,097.09 for dancing classes for his wife. He submitted that his wife transferred the money into his account to pay this expense. Property taxes are of utmost priority. Applicants must demonstrate that they had no financial resources to meet their property tax obligations and provide for the basic necessities of life. See C. (S.) v. Whitby (Town) 2016 CarswellOnt 3443, 89 O.M.B.R. 137 at para. 36.
33Having determined that the Applicant was able to pay the property taxes in 2022, the Board does not need to consider whether the Applicant was in a condition of extreme poverty.
CONCLUSION
34The Board finds that the Applicant was able to pay all his property taxes in 2022.
ORDER
35The Board orders that this application for reduction, cancellation or refund of the 2022 property taxes is dismissed.
"Subuola Awoleri"
SUBUOLA AWOLERI
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb