Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE:
March 24, 2023
WR 183543
Assessed Person(s):
Marjorie Jackson
Appellant(s):
McGinley Brothers Inc.
Respondent(s):
City of Toronto
Property Location(s):
31 Roslin Avenue
Municipality(ies):
City of Toronto
Roll Number(s):
1904-105-190-02400-0000
Appeal Number(s):
3470566
Taxation Year(s):
2020
Hearing Event No.:
778728
Legislative Authority:
Section 323.(7) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A
APPEARANCES:
Parties
Counsel*/Representative
McGinley Brothers Inc.
Brendan Charters
City of Toronto
Georgia Tanner*
HEARD:
March 17, 2023 by video conference
ADJUDICATOR(S):
Dan Weagant, Member
DECISION
OVERVIEW
1This appeal has been filed by Brendan Charters, on behalf of McGinley Brothers Inc. (the “Appellant”). The Appellant filed an application for the 2020 taxation year under s. 323 (1) of the City of Toronto Act, 2006, S.O. 2006, c. 11, Sched. A (the ”Act”). Section 323 (1) permits the City of Toronto (the “City”) to cancel, reduce or refund all or part of property taxes for a given year upon application, for a number of different reasons.
2The application was specifically filed under subsection 323 (1) (h) of the Act. That subsection allows the City to cancel, reduce or refund taxes, upon application, if “repairs or renovations to the land prevented the normal use of the land for a period of at least three months during the year.”
3Applications under this section are filed with the City. Toronto City Council (“Council”) makes a determination on the facts and either denies the application or grants the application. When applications are granted by the City, that approval comes with a calculation of the taxes eligible for cancellation, reduction of refund.
4Council’s decision may be appealed to the Assessment Review Board (“Board”) under s. 323.(7) when the Applicant believes Council was incorrect in not granting the application, or where the Applicant believes Council’s determination of the taxes to be cancelled, reduced or refunded is incorrect.
5In this case, City Council granted the application for the 2020 taxation year and cancelled taxes for that year in the amount of $191.90. It is this decision of Council that has been appealed under s. 323.(7) of the Act and is before this Board.
Background
6Renovation activities commenced at the subject property in the fall of 2019 and continued throughout 2020. These renovations were substantial with the net result producing a triplex dwelling on the property where a two-storey single family dwelling had stood prior to renovations.
7The Appellant advised that the construction work was complete at the property at the time of the hearing.
Areas of Agreement
8The Parties agree as follows:
Repairs or renovations prevented the normal use of the subject property for the 2020 calendar year.
The subject property is in the Residential property class.
The tax rate for properties in the Residential property class is 0.599704%.
The assessment of the subject property (January 1, 2016 current value assessment), including land and improvements is $1,011,000.
Issues for the Hearing
9At issue in this proceeding is:
The assessment of the improvements on the land prior to the initiation of repairs or renovations.
The amount of taxes levied in 2020 to be cancelled, reduced or refunded.
Result
10The Board finds that the assessment of the improvements to the land prior to the initiation of repairs or renovations is $178,000.
11Accordingly, the Board finds that the amount of the taxes levied in 2020 to be cancelled is $1,067.47.
ANALYSIS
Description of Subject Property
12Prior to renovations, the subject property was improved by a two-storey dwelling on a lot measuring 2,688 square feet. The dwelling had one bathroom, central air conditioning and an unfinished basement. The dwelling was constructed in 1920. It was unclear in evidence as to whether there had been any renovations made to the dwelling, since its original construction. The Municipal Property Assessment Corporation (“MPAC”) did apply a ‘B’ Renovation adjustment to the dwelling, effective 1990, to reflect assumed changes to the dwelling since its 1920 construction.
Issue 1 – What is the assessment applicable to the improvements to the land prior to the initiation of repairs or renovation?
The Appellant’s case
13The Appellant submitted that the $191.90 tax cancellation found by Council was too low because its underlying assumption of the value of the improvements at the subject property was incorrect. The Appellant submitted that when the Residential tax rate is applied to Council’s decision, the indicated improvement value used by the City was $32,000.
14The Appellant submitted that prior to the renovations being made, the dwelling was of average condition, of modest finishes and was habitable. He added that the correct value of the dwelling was much higher than was determined by the City and that the higher value should result in a higher tax cancellation.
15To determine the dwelling value, the Appellant cited two separate documents to establish constructed values of dwellings in the Greater Toronto Area (“GTA”). The first of these was an “Altus Report” indicating that constructed values in the GTA ranged from $115 to $215 per square foot. The second document was a report produced by Forecast Financial, a construction industry lender. That report indicated construction values attributed to the fourth quarter of 2022 of between $172 and $438 per square foot.
16By using the mid-range of these reports, the Appellant submitted that a value of approximately $200 per square foot of livable area at the subject dwelling was reasonable. The result of that value per square foot was approximately $226,000, based on a total living area of 1,131 square feet.
The City’s case
17The City’s response to the Appellant’s submissions focused on the construction values per square foot in evidence, submitting that these were values in the building industry for 2020 to 2022. Since the assessment of the subject property for the year under appeal is based on the 2016 current value assessment conducted by MPAC, the City submitted that these construction values would need to be adjusted to the 2016 valuation day to be applicable to the task at hand.
18The City confirmed that the original decision of Council assumed that the subject dwelling had a value of $32,000, explaining that this value was drawn from MPAC’s ‘notional value’ of the dwelling as part of the overall assessment at the property.
19The City called a witness from MPAC to explain the apportionment in the assessment between the land value and the improvement value. MPAC confirmed through testimony that “The property has been valued using a valuation model with no separate value for land and building. A notional value of $32,000 is attributed to the building” as indicated in documents adduced by the City from MPAC.
20An alternative approach to determine the dwelling value was advanced by the City at the hearing. The City reviewed vacant residential land sales in the vicinity of the subject property. Using a sample of nine sales, the City reviewed their corresponding assessments. The City testified that the assessments of comparable vacant land parcels (ranging from 2,614 square feet to 9,000 square feet) indicated a median value of $310 per square foot.
21The City then applied this median assessment value to the subject property’s 2,688 square feet to arrive at a land-only assessment value of $833,000, rounded. When that land value is deducted from the overall returned value of the subject property of $1,011,000, the result is $178,000.
Findings on Issue 1
22The City believes that since the assessment of the subject dwelling is the determining factor in deciding what the amount of cancelled taxes are, any calculations made must be made in reference to the assessment returned and applicable during the year under appeal.
23The City submitted that the construction values adduced by the Appellant to support the $225,000 dwelling value were for time periods that were too far from the January 1, 2016 valuation day applicable to the 2020 taxation year.
24The Board agrees that, if actual construction costs are to be used as an indication of value for this purpose, those costs must first be reflective of the valuation day applicable to the year under appeal and must also be adjusted for any depreciation that may apply owing to overall condition of the subject property. Neither of these elements were considered in the Appellant’s evidence of construction value. The Board disregards this approach.
25The Board also disregards the City’s application of the ‘notional value’ of the subject dwelling advanced by MPAC. The Concise Oxford Dictionary defines ‘notional’ as “speculative, not based on experiment or demonstration” and “existing only in thought, imaginary”.
26The Board cannot rely on a speculative or imaginary value as the current value assessment of the subject dwelling.
27The Board finds that the best evidence of the assessment of the dwelling portion of the subject property is the City’s approach in subtracting assessed values of land from the total assessment of the subject property. This approach reflects the 2016 current value assessment and makes direct comparisons of similar residential lands to determine the land value portion and by subtraction, the 2016 current value assessment of the subject dwelling. This approach was not refuted by the Appellant.
CONCLUSION
28The Board finds that the correct current value of the dwelling as part of the overall assessment of the subject property is $178,000. When the agreed-to tax rate of 0.599704% is applied to this value, the Board finds that the amount of taxes levied in 2020 to be cancelled is $1,067.47.
ORDER
29The Board orders that property taxes levied on the subject property at 31 Roslin Avenue for the 2020 taxation year are cancelled, in the amount of $1,067.47.
"Dan Weagant"
DAN WEAGANT
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb