Tribunals Ontario Tribunaux décisionnels Ontario Assessment Review Board Commission de révision de l’évaluation foncière
ISSUE DATE: March 15, 2023 FILE NO.: WR 183447
Assessed Person(s): James Wason, Jean Wason Appellant(s): James Wason Respondent(s): City of Hamilton Respondent(s): Municipal Property Assessment Corporation Region 19 Property Location(s): 11 Gristmill Place Municipality(ies): City of Hamilton Roll Number(s): 2518-140-220-45960-0000 Appeal Number(s): 3496855 Taxation Year(s): 2022 Hearing Event No.: 778664 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Representative |
|---|---|
| James Wason | Self-represented |
| Municipal Property Assessment Corporation | Tim Oberle |
| City of Hamilton | No one appeared |
HEARD: March 6, 2023 by telephone conference call
ADJUDICATOR(S): Dan Weagant, Member
DECISION
OVERVIEW
1James Wason (the “Appellant”) brought an appeal before the Assessment Review Board (the “Board”) relating to the assessment 11 Gristmill Place (the “Subject Property”) in the City of Hamilton for the 2022 taxation year.
2During the course of the Request for Reconsideration (“RfR”) process conducted by the Parties, The Municipal Property Assessment Corporation (“MPAC”) amended its opinion of value from $696,000 as returned, to $621,000, resulting from an adjustment to the Subject Property’s quality of construction code.
3The Appellant takes the position that the adjusted assessment proposed by MPAC is still too high and that when the assessments of nearby properties are considered, the assessment should be reduced to $543,000.
Issues for the Hearing
4At issue in this proceeding is:
- What is the current value of the Subject Property as of the statutory valuation day of January 1, 2016? and
- Is the current value equitable with the assessments of similar lands in the vicinity?
Result
5For the reasons that follow, the Board finds that the correct current value of the Subject Property is $621,000.
6The Board also finds that a reduction is required to make this current value equitable with the assessments of similar lands in the vicinity, resulting in an assessment of $612,000.
ANALYSIS
Description of Subject Property
7The Subject Property is a 5,554 square foot lot, improved with a single-family detached residence. The residence was built in 2005. It is a single-storey dwelling comprising 1,661 square feet of living area with a finished basement area of 1,227 square feet. The basement has walkout access to the rear yard of the property.
Issue 1 – What is the current value of the Subject Property as of the statutory valuation date of January 1, 2016?
Applicable Law
8In accordance with s. 44(3)(a) of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”), the Board must first 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.”
9Accordingly, the Board must first determine what the Subject Property would have sold for in an arm’s length transaction on the statutory valuation day. Section 19.2(1) of the Act confirms that the valuation day for the 2022 taxation year is January 1, 2016.
Evidence on Current Value
10The best evidence of current value would be the sale of the Subject Property on or close to the valuation day of January 1, 2016. If no such sale occurred, the Board considers sales of comparable properties to establish the current value of the Subject Property.
11MPAC used five sales of properties in the City of Hamilton that it deemed to be comparable to the Subject Property, time-adjusted the sale prices, adjusted those prices to reflect differences in the properties that could be quantified and arrived at a value per square foot for each.
12MPAC’s five proposed comparable properties had time-adjusted sale values from $856,000 to $1,101,743. When the adjustments for differences in size, age and attributes such as an outdoor pool, the absence of a walkout basement and basement finishes, the result was a range of $394.03 to $455.61 per square foot. The median of this range was $404.94.
13To determine the correct current value of the Subject Property, MPAC applied this median value per square foot to the 1,661 square feet of living area at the Subject Property to arrive at a value of $672,000, rounded.
14MPAC testified that this current value was the value determined prior to the adjustment for the quality of construction rating of 7.5 applied to the property for the value returned. According to MPAC, the correct quality of construction rating is 7.0 and when applied to the Subject Property’s current value determined, the adjusted current value is reduced from $672,000 to $621,000.
15The Appellant submitted that his case focused entirely on the comparison of the Subject Property’s assessment to the assessments of other properties, located within one kilometre of the Subject Property. He did not cross-examine MPAC’s witness on the question of current value and did not refute MPAC’s findings.
Findings on Issue 1
16The Board must determine the correct current value of the Subject Property, based on the best evidence available at the hearing and in the testimony of the witnesses. In this case, the Appellant has not adduced any evidence related to current value, and has not refuted MPAC’s evidence in this regard.
17The Board finds that MPAC’s approach constitutes sufficient evidence to demonstrate the current value of the Subject Property because it relies on the sales of comparable properties and makes reasonable adjustments to those comparable properties.
18The Board finds that the correct current value of the Subject Property is $621,000 for the 2022 taxation year.
Issue 2 - Is the current value equitable with the assessments of similar lands in the vicinity?
19Section 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.”
Evidence on Equitable Adjustment
20The Appellant provided evidence of the assessments of nine properties within one kilometre of the Subject Property. He reviewed the attributes of each to the extent possible using available resources, including public real estate listings and the information on MPAC’s website that was available to him. The following table summarizes the characteristics of each of the nine properties adduced by the Appellant as compared to those attributes of the Subject Property.
| Living Area (square feet) | Lot Size (square feet) | 2016 CVA | Assessment Difference from Subject Property | |
|---|---|---|---|---|
| Subject Property | 1,661 | 5,554 | $696,000* | |
| Property 1 | 1,512 | 6,790 | $532,000 | $164,000 |
| Property 2 | 1,661 | 5,554 | $550,000 | $146,000 |
| Property 3 | 1,547 | 5,328 | $536,000 | $160,000 |
| Property 4 | 1,534 | 6,534 | $549,000 | $147,000 |
| Property 5 | 1,573 | 5,628 | $559,000 | $137,000 |
| Property 6 | 1,656 | 6,882 | $549,000 | $147,000 |
| Property 7 | 1,525 | 5,448 | $544,000 | $152,000 |
| Property 8 | 1,561 | 5,448 | $529,000 | $167,000 |
| Property 9 | 1,781 | 7,109 | $539,000 | $157,000 |
21The Appellant’s data on the nine similar properties proposed was accompanied by photographs of each, taken from the street, to illustrate the level of similarity between them and the Subject Property.
22All nine properties proffered by the Appellant are single-storey or bungalow dwellings with a double car garage and a bay window in the front façade. These attributes are shared by the Subject Property.
23The Appellant focused on the difference in assessment of each property. Those differences range from $137,000 to $167,000. The Appellant submitted that the average of the nine differences in assessment is $153,000. When deducted from the returned assessment of the Subject Property of $696,000, the result is $543,000. By this process, the Appellant submitted that since the nine properties in his evidence were in the vicinity of, and very similar to, the Subject Property, the assessment of the Subject Property should be reduced to $543,000 to be a fair and equitable.
24By contrast, MPAC provided an equity analysis report detailing the sales of 30 properties located within 3 kilometres of the Subject Property, occurring between January 2015 and September 2016. MPAC calculated an Assessment to Sale Ratio (“ASR”) for each property. The ASR of a sample of sold properties is a tool often used to determine if properties in the vicinity, as a group, are assessed above or below their respective current values. If sold properties are assessed below their current value, a reduction in the subject assessment below current value is required to make the subject 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.
25MPAC’s analysis reflected a median ASR of 1.01, indicating that similar lands in the vicinity are assessed at a level of 1.01 times their respective sale values. MPAC submitted that this 1.01 median ASR indicates that equity is achieved and an equitable adjustment is not required.
Findings on Issue 2
26There is no specific method established in law for the Board to adopt in determining whether a downward adjustment in a current value is necessary for it to be equitable. In this case, the parties applied two different methods. One method considers the assessments of other properties; the other considers assessments as they related to respective, time-adjusted sale values.
27MPAC’s ASR method includes 30 properties, within 3 kilometres of the Subject Property. Those properties were single-family dwellings. MPAC’s submission indicated that building size, age of dwellings and quality of construction were also considered, but no specific data on these attributes was in evidence.
28The Appellant’s method focused on the assessments of nine specific addresses that had the same or very similar attributes as the Subject Property.
29In making its decision on the best method of determining whether the current value determined represents equitable assessment, the Board relies on Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299 (“Loblaw”), where Justice Nordheimer wrote, in paragraph 25:
In my view, the proper approach to be taken to determining what are “similar lands in the vicinity” is that set out by Saunders J. in Trizec, that is, that all points of comparison must be considered.
30The best method of determining equitable assessment in this case is that of the Appellant. That evidence was very specific as to the comparison made, with references to building type, size of lot and dwelling and age. MPAC’s equity analysis evidence was not as specific. In this case, the method that best takes into account “all points of comparison” as indicated in Loblaw, is that of the Appellant.
31The nine similar properties in the Appellant’s sample showed assessment values, per square foot of living area of between $303 and $358. When these two extremes are applied to the 1661 square feet of living area of the Subject Property, the result is $503,000 to $595,000. The midpoint of these two values is $549,000. This midpoint is, coincidentally almost identical to the assessment applied to the property most similar in evidence to the Subject Property, that being Appellant’s property #2 with the identical square footage of building and land. That assessment is $550,000.
32During cross-examination of the Appellant by MPAC, it was revealed that many of the nine properties cited by the Appellant did not have a walkout basement or basement finishes. The Appellant’s similar property #2 had neither improvement.
33MPAC’s evidence of current value made several adjustments to comparable properties for the purpose. It applied one specific value for ‘finished basement’, and one specific value for ‘walkout basement’. These values were derived from MPAC’s mass appraisal system and are intended to be a consistent value application for these variables.
34For a walkout basement, MPAC uses an adjustment of $22,446. For a finished basement, MPAC uses an adjustment value of $39,420. Neither feature is included in the assessment of the Appellant’s property #2. When these two values derived by MPAC are added to the assessment of the Appellant’s property #2, the result is $611,866 or $612,000, rounded.
35The Board finds therefore that the equitable assessment of the Subject Property, when all points of comparison are made, is $612,000; a reduction of $9,000 from the current value determined above.
CONCLUSION
36The Board finds that the current value of the Subject Property at 11 Gristmill Place, for the 2022 taxation year is $621,000.
37When reference is made to the assessments of similar lands in the vicinity the Board finds that a reduction is required to make the assessment of the Subject Property equitable. That reduction is $9,000.
ORDER
38The Board orders that the assessment of 11 Gristmill Place is reduced from $696,000 to $612,000, in the residential property class for the 2022 taxation year.
"Dan Weagant"
DAN WEAGANT MEMBER Assessment Review Board
Website: www.tribunalsontario.ca/arb