Tribunals Ontario

Assessment Review Board

Issue Date: May 16, 2023 File No.: WR 183699 Assessed Person(s): Robert Arthur Jeffrey; Cindy Lynn Asselstine Appellant(s): Cindy Asselstine Respondent(s): Municipal Property Assessment Corporation Region 05 Respondent(s): Loyalist Township Property Location(s): 635 Millhaven Road Municipality(ies): Loyalist Township Roll Number(s): 1104-010-090-06300-0000 Appeal Number(s): 3499758 and 3511860 Taxation Year(s): 2022 and 2023 Hearing Event No.: 779481 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31

Appearances

Parties	Representative
Cindy Asselstine	Self-represented
Municipal Property Assessment Corporation	Kalin Doucet
Loyalist Township	No one appeared

Heard: April 25, 2023 by telephone conference call

Adjudicator(s): Dan Weagant, Member

Decision

Overview

Background

1Cindy Lynn Asselstine (the "Appellant") appealed the assessment returned by the Municipal Property Assessment Corporation ("MPAC") on the subject property at 635 Millhaven Road, for the 2022 taxation year. This appeal was subsequently deemed for the 2023 taxation year, pursuant to s. 40(26) of the Assessment Act. (the "Act").

2MPAC returned a value of $286,000, in the Residential property class. The Appellant believed this to be too high, indicating that the correct current value is approximately $238,000.

3In addition, the Appellant believed the property class under which the subject property was assessed is incorrect. MPAC assessed the subject property in the Residential property class. The Appellant believes the subject property should be assessed in the Farm property class.

4The subject property abuts another property owned by the same assessed persons. The adjacent property is in the Farm property class.

Issues for the Hearing

5At issue in this proceeding is:

1. A determination of classification of the subject property and whether it is farm land used only for farm purposes, as defined by s.19 (5) of the Act.
2. A determination of the current value of the subject property;
3. Whether a reduction in the current value should be made to reflect equitable assessment.

Result

6The Board finds that the subject property is not farm land used only for farm purposes as defined by the Act and is correctly assessed in the Residential property class for the years under appeal.

7The Board also finds that the current value of the subject property is $256,000 and that for the assessment to be considered equitable when reference is made to the assessments of similar lands in the vicinity, that value must be reduced.

8The assessment of the subject property is therefore reduced from $286,000 as returned, to $238,000 in the Residential property class, for the 2022 and 2023 taxation years.

Analysis

Description of Subject Property

9The subject property is a 2.71-acre parcel with frontage on Millhaven Road. It lies within a rural residential neighbourhood and abuts farm land. The subject property is improved with a detached, single-family dwelling and a detached garage. The dwelling was constructed in 1952 and was renovated in 2001.

Issue 1 – Is the subject property farm land used only for farm purposes?

The Legislative Scheme

10Under the Act, lands in the Farm property class are placed in a separate tax category and are assessed at a rate of 25% of the rate for residential properties.

11For that reason, the legislative scheme has been designed so that there is no doubt that properties that attract this preferential tax treatment are farm lands used for farm purposes and that those farms lands are used for farm purposes by bona-fide farmers.

12Whenever and wherever the question of a specific property's status in the Farm property class is at issue, the answer to that question requires the Board to determine whether the subject lands or a portion of those lands are farm lands used only for farm purposes, along with its current value.

13That decision is forwarded to AFRAAT as an Interim Decision of the Board.

14When the Board issues its Interim Decision to AFRAAT, that tribunal must decide if the subject land is eligible for Ontario's Farm Property Class Tax Rate Program. In order to do so, AFRAAT must determine if the farmer who is active on the subject property is eligible for the Farm Property Class Tax Rate Program, in accordance with s. 8 and s. 8.1 of the Regulation. Those sections of the Regulation set out the eligibility criteria for farmers and farm businesses to qualify the subject farm lands used for farm purposes as being in the Farm property class.

15When the Board receives the decision from AFRAAT on the question of eligibility, the Board then applies either the Farm property class to the lands at issue or applies the property class initially assigned to the subject lands by MPAC prior to the referral of the issue to AFRAAT.

Section 19 (5) of the Act states:

Farm lands and buildings

(5) For the purposes of determining the current value of farm lands used only for farm purposes by the owner or used only for farm purposes by a tenant of the owner and buildings thereon used solely for farm purposes, including the residence of the owner or tenant and of the owner's or tenant's employees and their families on the farm lands,

(a) consideration shall be given to the current value of the lands and buildings for farm purposes only;

(b) consideration shall not be given to sales of lands and buildings to persons whose principal occupation is other than farming; and

(c) the Minister may, by regulation, define "farm lands" and "farm purposes".

"Used only for farm purposes"

16In determining what a farm purpose use is, the Act is specific and prescriptive. It requires the land to be used only for farm purposes to be considered for the Farm property class. This narrow definition has been found by this Board to be intentional, on the part of the legislature, because of the tax advantage gained by being classified as Farm.

17As a result, the Appellant is required to meet the onus of burden of proof, which in this case means proving that the subject lands are farm lands used only for farm purposes.

Appellant's Case

18The Board heard the nature of the uses put to the land by the Appellant. During the years under appeal, the Appellant testified that several plots (six more or less) were prepared on the property for the purpose of planting and growing tomatoes. The Appellant provide detail on this tomato growing effort and indicated that:

1. Six areas, each of approximately 24 square feet were set out on the subject property in areas not occupied by trees.
2. Soil augmentation in these areas was necessary because this area of Loyalist Township is characterized by rock outcropping and very shallow parent soil depths over bedrock.
3. The planting areas are defined by wooden barriers that hold additional soil in place so that the plants have the growing medium necessary to grow.

19The Appellant testified that the tomatoes grown were taken to market and formed a part of the farm business conducted by the Appellant and her family.

20The Appellant's submissions are that, because the owners of the subject property are farmers, this property ought to be considered farm land used only for farm purposes, as it includes the family farm house and the land is put to farm use.

MPAC's Case

21MPAC undertook a review of the property in 2020 and submits that the subject property is clearly used primarily for residential purpose, noting that the improvements are a single-family dwelling and a detached garage. MPAC further submitted that the majority of the subject property is treed.

22MPAC does not view the Appellant's activities in the years under appeal in growing tomato plants as being a bona fide farming activity, noting that the entire area devoted to tomato cultivation is approximately 124 square feet, or 1/1,000 of the total site area.

23MPAC submits that the subject property cannot be assessed in the Farm property class because there were no farm activities occurring during the years under appeal.

Findings on Issue 1

24The Board's role in determining whether lands are in the Farm property class is a narrow one. The final decision is made by AFRAAT. The Board's role is to determine if the subject property supports the activities described in s. 19(5) of the Act. In order for the Board to find that the subject property is farm land used only for farm purposes it must apply the specific uses described in s. 19(5).

25The first part of that section refers to "farm land used only for farm purposes". There is no definition of these terms in the Act. In practice, the Board makes the determination of use based on the evidence at hearing.

26In this case the Board heard that a small area of the subject property is cultivated and that the ensuing production is brought to market for sale. That could be considered a farm use, but that determination must be derived from the context of the use and the subject property.

27The subject property is heavily treed. There are no farm buildings on the property and no livestock present. The only activity on the subject land described by the Appellant is growing tomatoes in what could be described as a garden plot. None of this is clear evidence that the subject property is farm land used only for farm purposes. Therefore, the Board finds that the subject property is properly classified as Residential, as returned by MPAC for the years under appeal.

Issue 2 – What is the current value of the subject property?

MPAC's Case

28MPAC produced a valuation report that compared the subject property with seven other properties in Loyalist Township that it deemed were sufficiently similar to the subject property to be used to determine its current value.

29These seven proposed comparable properties all sold within 12 months of the January 1, 2016 valuation day stipulated in the Act. To compare these seven sale values to the subject property, MPAC adjusted them to account for the passage of time. The effect is that the sale prices can then be compared as though they sold on the valuation day.

30The range of the seven, time-adjusted sale ("TAS") values is $227,000 to $277,561 with a median value of $248,429. MPAC views the most comparable property in its sample to be sale # 2 with a sale price of $280,000 and a TAS value of $277,561.

31MPAC adopted a rounded value of $277,000 as its opinion of current value of the subject property.

Appellant's Case

32The Appellant submitted that the best comparable property in MPAC's evidence to indicate the current value of the subject property is MPAC's proposed comparable sale # 6. The Appellant prefers this comparable because:

1. it has a private well and septic tank, like the subject property;
2. it has a larger lot than the other comparable properties;
3. it abuts a farm;
4. it has a comparably sized dwelling and had a major renovation, like the subject property; and
5. it also has a detached garage.

33The Appellant further submitted that any comparable properties that have municipal water and sanitary sewer services are not suitably comparable with the subject property because it has neither service. While the Appellant did not quantify the value difference between a municipally serviced and non-municipally serviced property, she asserted that, all other things being equal, a property with municipal water and sanitary sewer would be worth more than one without.

34The Appellant submitted that the current value of the subject property should be $238,902; similar to the TAS value of MPAC's proposed comparable # 6.

Findings on Issue 2

35The best evidence of the current value of a property is the sale of that property on or near the valuation day applicable to the years under appeal. In this case, the valuation day is January 1, 2016. The next best evidence of the current value of a property are the sale values of comparable properties.

36There being no sale of the subject property in evidence, the Board finds the best evidence of the current value of the subject property is the evidence adduced by MPAC, of seven single-family dwellings in Loyalist Township. MPAC's was the only evidence at the hearing related to the sales of comparable properties.

37Of the seven property sales in evidence, the Board disregards the three properties with municipal services. The availability of municipal water and sewer services is a fundamental value consideration. Comparing properties with these services to properties without them is not a meaningful comparison in determining current value.

38MPAC's four remaining proposed comparable properties show a range of TAS values from $230,657 to $263,639. The Board finds two of these properties, 969 Millhaven and 788 Simons to be inferior to the subject property due to dwelling age and lot size. The TAS values of these two properties are $248,429 and $230,657 respectively.

39The Board also finds that one proposed comparable, at 1464 County Road 6 is superior in value to the subject property owing to its dwelling size, the presence of 1,277 square feet of living area on the basement level and eight-foot ceilings on that level. The TAS value of 1464 County Road 6 is $263,639.

40By using the lowest TAS value of a superior property in evidence ($263,639) and the highest TAS value of an inferior property in evidence ($248,429), a range emerges within which the current value of the subject property can reasonably fall. The midpoint of that range is $256,034.

41The Board finds that the current value of the subject property is $256,000, rounded.

Issue 3 – Does the current value determined require a reduction for it to be considered equitable assessment when reference is made to the assessments of similar lands in the vicinity?

Appellant's Case

42The Appellant made no specific submissions with respect to any reduction in the current value of the subject property for the purposes of equitable assessment, except to submit that she believed the value returned was too high when it was compared to other assessments in Loyalist Township.

MPAC's Case

43MPAC produced an equity study, where the assessments of 30 similar properties in the vicinity of the subject property were compared with their respective TAS values. The 30 properties are located within three kilometres of the subject property and are all single-family dwellings.

44The comparison of assessment to TAS value is referred to as an Assessment to Sale Ratio ("ASR"). ASRs are a common means of determining whether a downward adjustment to a current value determined by sales is necessary when reference is made to the assessments of similar lands in the vicinity.

45A median ASR below 1.00 indicates that the level of assessment in the sample of 30 properties is below current values. An ASR above 1.00 indicates that the level of assessment in the sample of 30 properties is above current values. The median ASR value in MPAC's equity study is 0.93.

Findings on Issue 3

46MPAC's equity study indicates that the ASRs of 21 of the 30 sales are below 1.00 and that the median ASR of the 30 properties is 0.93. This is clear evidence that when reference is made to the assessments of similar properties in the vicinity, their assessments are approximately 7% below their respective current values. The Appellant did not refute MPAC's ASR.

47Accordingly, a reduction in the current value determined for the subject property is required for it to represent equitable assessment. That reduction is 7%. When applied to the current value of $256,000 determined herein, the result is $238,080 or $238,000, rounded.

Conclusion

48The Board finds that the subject property is not farm land used only for farm purposes as defined by the Act. The Board finds further that the subject is correctly assessed in the Residential property class for the years under appeal.

49The Board also finds that the current value of the subject property is $256,000 and that for the assessment to be considered equitable when reference is made to the assessments of similar lands in the vicinity, that value must be reduced.

Order

50The assessment of the subject property at 635 Millhaven Road is reduced from $286,000 as returned, to $238,000 in the Residential property class, for the 2022 and 2023 taxation years.

"Dan Weagant"

DAN WEAGANT MEMBER

Assessment Review Board Website: www.tribunalsontario.ca/arb