Tribunals Ontario

Assessment Review Board

ISSUE DATE: June 12, 2023 FILE NO.: WR 183242 Assessed Person(s): Balwinder Tamber; Pardeep Tamber Appellant(s): Balwinder Tamber; Pardeep Tamber Respondent(s): Municipal Property Assessment Corporation Region 15 Respondent(s): City of Brampton Property Location(s): 6 Cheval Court Municipality(ies): City of Brampton Roll Number(s): 2110-120-003-46900-0000 Appeal Number(s): 3481965 and 3513097 Taxation Year(s): 2022 and 2023 Hearing Event No.: 777784 Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties	Representative
Balwinder Tamber; Pardeep Tamber	Gurjit S. Grewal
Municipal Property Assessment Corporation	Olivia Medeiros
City of Brampton	No one appeared

HEARD: January 11, 2023 by telephone conference call

ADJUDICATOR(S): Pierre R. Lavigne, Member

DECISION

OVERVIEW

1Balwinder Tamber; Pardeep Tamber (the "Appellants") appeal the correctness of their property tax assessment for the taxation year 2022. The principal issues are the correct 2016 value of the subject property and whether any equitable adjustment should be made to this value.

Background

2The Appellants are the owners of a 16,292 sq. ft. two-story detached residential dwelling at 6 Cheval Court in the City of Brampton, in the Regional Municipality of Peel. The residence was custom built in 2020. The subject property was assessed at $6,712,000 for the taxation year 2022. The Appellants claim that the assessment is incorrect because it is too high and submits that the correct assessment should be $5,247.000.

3The Municipal Property Assessment Corporation ("MPAC") submits that the correct 2016 current value is $9,626,000 and that no equity adjustment is required pursuant to s. 44(3)(b) of the Assessment Act R.S.O. 1990, c. A.31. MPAC did not give notice that it was seeking higher assessments than originally returned and takes the position that the assessment of $6,712,000 should be confirmed.

4This appeal is made under s. 40(1) of the Assessment Act, R.S.O. 1990, c. A.31 ("Act"). Pursuant to s. 40(26) of the Act, a further appeal was deemed to have been made for the 2023 taxation year.

Issues for the Hearing

5At issue in this proceeding is:

1. A determination of the 2016 current value of the subject property.
2. Whether an equity reduction in the current value should be made?

Result

6The correct 2016 current value of the subject property is $6,750,000. No equity reduction is required. No increase in assessment was requested by MPAC. Accordingly, the 2022 and 2023 taxation year assessments are confirmed at $6,712,000.

ANALYSIS

Description of Subject Property

7The subject property was custom built in 2020 on a 2.07-acre lot. The two-storey residential structure is 16,292 sq. ft., with a finished basement of 6,221 sq. ft. It has five bedrooms and seven-and-one-half baths. It also has two large, attached garages, one of 2,523 sq. ft. and one of 897 sq. ft. There is also a 392 sq. ft. carport. MPAC is of the opinion that the quality class of residence is 9.5 out of 10.

Issue 1 - What is the correct 2016 current value of the subject property?

The Governing Statutory Scheme

8Section 19(1) of the Act provides that the assessment of land shall be based on its current value. 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."

9Section 19.2(1) paragraph 4 of the Act fixes the valuation day for the 2020 taxation year at January 1, 2016. Section 48.6 of Ontario Regulation 282/98 fixes the valuation day for the 2021, 2022 and 2023 taxation years at January 1, 2016, as well.

10Pursuant to s. 40(17) of the Act, the onus is on MPAC to prove the correct value of the subject property.

11Section 44(3)(b) of the Act provides for a reduction, if required, of an assessment based on current value to make the assessment equitable.

MPAC's Evidence

12Olivia Medeiros gave evidence for MPAC. She is a property valuation analyst with MPAC. She was qualified as an expert witness in the valuation of residential properties based on her experience of 14 years as a property analyst, the last ten covering Brampton. Her qualifications as an expert witness were not challenged.

13Ms. Medeiros' opinion was that the subject property, as constructed in 2020, had a 2016 current value of $9,626,000. She arrived at her opinion by the direct comparison approach: deriving her opinion from an examination of sales of comparable properties at or near the valuation day of January 1, 2016.

14To find comparable properties, she limited her search to properties with a quality class at or near 9.5 and a large square footage, which occurred within one year of the valuation day. Due to COVID-19 restrictions, she was not able to personally inspect the property but had access to interior photos. She indicated that the team of assessors relied on interior photos supplied by the owner as well as building plans to conclude that the quality class was 9.5. She indicated that finding such properties was difficult due to the rarity of properties of this size and quality. Ultimately, she found two sales which she judged to be comparable. She testified that the comparable sales occurred in similar neighbourhoods to that of the subject.

15Property #1, 91 Rocmary Place, was 15.5 kms to the east in the adjacent City of Vaughan. This 11,288 sq. ft., two-storey, quality class 9.5 residence on a 1.78-acre lot sold in June of 2016 for $5,600,000. Ms. Medeiros time adjusted this price to $5,258,377 to represent January 1, 20216 value. The time adjustment was not contested. She further adjusted the value by deducting $582,145 in land value because, based on data available to MPAC, land of the subject property's area in Vaughan was more valuable by that amount. The land adjustment was not contested. After the time and land adjustments, Property #1's adjusted value was $4,676,232 and $414.27 per sq. ft. of structure.

16Property #2, 516 Indian Road was 28 kms to the south in the adjacent City of Mississauga. This 6,055 sq. ft. two-storey, quality class 9.5 residence on a 0.54-acre lot sold in September 2016 for $5,580,000. Ms. Medeiros time adjusted this price to $5,070,865 to represent January 1, 2016 value. The time adjustment was not contested. She further adjusted the value by deducting $423,610 in land value because, based on data available to MPAC, land of the subject property's area in Mississauga was more valuable by that amount. The land adjustment was not contested. After the time and land adjustments, Property #2's adjusted value was $4,647,255 and $767.51 per sq. ft. of structure.

17Ms. Medeiros averaged the time and land adjusted calculated values per sq. ft. of structure to conclude that $590.89 per sq. ft. of structure was a fair indication of value. She applied this value to the 16,292 square footage of the subject property to arrive at an opinion of correct 2016 current value for the subject of $9,626,000 (rounded).

Appellants' Evidence

18Mr. Grewal, the Appellants' representative, presented three properties as comparable, as follows:

Property	Address	Year Built	Lot Size	Square Feet	CVA	Quality Class	$/s. f. of CVA
Subject	6 Cheval Court	2020	2.07 ac	16,292	$6,712,000	9.5
A1	27 Bellini	2010	2.07 ac	11,435	$4,630,000		404.90
A2	7 Manswood Crescent	1996	3.01 ac	10,259	$2,175,000		212.01
A3	10 Angelbluff Court	2015	1.91 ac	12,500	$4,207,000		336.56

19As indicated above, the proposed comparables presented by the Appellants only make reference to the 2016 current value assessment of the subject property and the proposed comparables, not sale prices. In cross-examination Mr. Grewal testified that based on the MLS listings, his comparable A1 sold in September 2016, his comparable A2 sold in May 2015 and his comparable A3 sold in January 2017. With respect to quality class, he testified that in a previous hearing, Ms. Medeiros had testified that his comparables A1 and A3 were of quality class 9.0.

20In reply evidence, Ms. Medeiros testified that she had personally inspected the Appellants' proposed comparable A2, 7 Manswood Crescent, and evaluated it at a quality class 7. She also testified that in her judgement it was not a comparable property as it was a semi-detached style home, quite different than the subject property.

Analysis

21On the whole, the Board prefers the evidence of Ms. Medeiros. She gave expert evidence buttressed by a detailed expert report. The sale prices of her comparables were adjusted for time and land value, providing more accurate indications of value.

22The Board gives little weight to the properties proposed by the Appellants because the spreadsheet entered into evidence is unclear whether the values indicated are for current value assessments or sale prices. On its face they are assessment values, not sale prices. Assessment values can be incorrect. That is the very basis for this appeal. Actual sale prices are a better data point to derive indication of value.

23The Board rejects as comparable, the Appellants' property A2 because the Board accepts Ms. Medeiros' evidence that this property is of quality class 7 and as a semi-detached, is not comparable to the subject property.

24The Board, however, rejects as comparable Ms. Medeiros' sale of 516 Indian Road based on the structure size. To be comparable, properties should be competitive with the subject property. They must be reasonable substitutes for the subject such that a potential buyer contemplating a purchase of the subject would also consider the comparable as an alternative with similar amenities.

25The subject property is improved with a massive 16,292 sq. ft. structure, whereas 516 Indian Road's structure is 6, 055 sq. ft. Though it is of a similar quality class, it is 37% the size of the subject. Its lot size, at 0.54 acres, is also 26% of the 2.07-acre lot size of the subject. It is improbable that a purchaser contemplating the purchase of the subject would consider such a smaller property in the mix of potential substitutes. Furthermore, the resulting adjusted value per sq. ft. of 516 Indian Road does not take into account economies of scale from the difference in size.

26On the other hand, 9 Rocmary Road, at 11,435 sq. ft. is of a comparable size to the subject, even though 70% of the size of the subject, it is of sufficiently large size that a potential purchaser of the subject would more likely consider it a competitive property. The lot size, at 1.78 acres, is also quite comparable to the subject's lot of 2.07 acres.

27For these reasons the Board finds that the best indication of value is derived from the adjusted sale price of 9 Rocmary Road, $414.27 per sq. ft. of structure. Applying this value to the 16,292 sq. ft. of the subject produces a value of $6,749, 286. The Board finds that the correct 2016 current value of the subject is $6,750,000 (rounded).

Issue 2 - Is an equity adjustment required pursuant to s. 44(3)(b)?

28Ms. Medeiros provided an Equity Analysis Report examining the ratio between the sale prices and assessments of 30 similar properties within 2.5 kms of the subject property and in the same homogenous Neighbourhood. The conclusion of her study was that the properties in the study were assessed at 98% of their sale price. In her opinion this was within the 95% to 105% range that MPAC considers an equitable assessment. Her conclusion was that similar properties were not generally underassessed. Accordingly, there was no requirement for equity adjustment pursuant to s. 44(3)(b) of the Act.

29Mr. Grewal entered into evidence a spreadsheet identifying two similar properties in the vicinity which he relied on to establish inequity:

Roll Number	Address	Year Built	Lot Size	Sq. Ft.	CVA	Quality Class	Rate/ Sq. Ft.
Subject Property	2110-120-003-46900-0000	6 Cheval Court	2020	2.07 acres	16,292	$6,712,000	9.5
1		34 Cheval Court	2013	2.00 acres	10,870	$4,444,000
2		23 Ryckman Lane	2014	2.25 acres	13,692	$4,208,000

Median = 8,652,000 / 23,562 sq. ft. = $367.20 Estimated 2016 Base Year CVA of Subject = 16,292 x $367.20 = $5,982,422

30In Mr. Grewal's submission the median assessed value of these two properties produced a value of $367.20 per sq. ft. of structure, which applied to the 16,292 sq. ft. of structure produced an equitable assessment of $5,982,422.

31The Board prefers the evidence of Ms. Medeiros on the subject of equity because her sample size is much larger and provides a more accurate view of the level of assessment of properties in the vicinity. The Board finds there is no need for an equitable adjustment.

CONCLUSION

32The Board finds that the correct current value of the subject property is $6,750,000. The Board finds that no equitable reduction in the correct current value is required by the evidence. As the correct current value is higher than the returned value and MPAC has not requested an increase in assessment, the assessment as returned is confirmed.

ORDER

33The Board orders that the $6,712,000 assessment for the 2022 and 2023 taxation years is confirmed.