Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: January 30, 2023

FILE NO.: WR 183046

Assessed Person(s): Alia Qadri

Appellant(s): Alia Qadri

Respondent(s): Municipal Property Assessment Corporation Region 15

Respondent(s): City of Brampton

Property Location(s): 24 Morris Court

Municipality(ies): City of Brampton

Roll Number(s): 2110-120-003-45240-0000

Appeal Number(s): 3484861, 3480756 and 3488921

Taxation Year(s): 2020, 2021 and 2022

Hearing Event No.: 777779

Legislative Authority: Sections 33 and 40 of the Assessment Act, R.S.O. 1990, c. A.31

APPEARANCES:

Parties

Representative

Alia Qadri

Gurjit Grewal

Municipal Property Assessment Corporation

Olivia Medeiros

City of Brampton

No one appeared

HEARD: January 10, 2023 by telephone conference call

ADJUDICATOR(S): Christopher Voutsinas, Vice-Chair

DECISION

OVERVIEW

1Alia Qadri (“Appellant”) is the owner of 28 Morris Court (“Subject Property”) in the City of Brampton. The Appellant is represented by Gurjit Grewal and takes the position that the current value assessment of $8,807,000 for the period commencing December 23, 2020 and the 2021 taxation year, and $9,511,000 for the 2022 taxation year, are incorrect and too high.

2The Municipal Property Assessment Corporation (“MPAC”) was represented by Olivia Medeiros, who took the position that the current value of the Subject Property is $13,537,000. Yet, MPAC did not submit a request for an increase in the current value assessment and was requesting that the current value assessment for the Subject Property be confirmed at $9,511,000 for the 2021 and 2022 taxation years.

3MPAC indicated that it had made omitted assessments under s. 33 of the Assessment Act, R.S.O. 1990, c. A.31 (“Act”) for the Subject Property for the 2020 taxation year with an effective date as per the City of Brampton’s occupancy date for the then newly built residence of December 23, 2020, and for the 2021 taxation year with an effective date of January 1, 2021. MPAC submitted at the hearing that it had withdrawn the s. 33 omitted assessment for the 2020 taxation year with an effective of December 23, 2020. The Appellant did not dispute or object to the withdrawal of this appeal. As a result, it was agreed by the Parties that only the 2021 and 2022 taxation years were in question.

4No one appeared at the hearing on behalf of the City of Brampton.

Issues for the Hearing

5At issue in this proceeding is:

1. What is the current value of the Subject Property for the 2021 and 2022 taxation years?

2. Is an equity reduction of the current value required, and if so, how much?

Result

6The s. 33 omitted assessment for the 2020 taxation year with an effective date of December 23, 2020 is withdrawn by MPAC.

7The Assessment Review Board (“Board”) finds that the s. 33 omitted value of the Subject Property for the 2021 taxation year is $8,840,000 and that the Subject Property’s correct current value for the 2022 taxation year is $9,544,000.

8The Board finds that with reference to similar lands in the vicinity no equity reduction is required for the 2021 and 2022 taxation years.

ANALYSIS

Description of Subject Property

9The Subject Property is a custom-built, single-family detached residence located at 24 Morris Court in the City of Brampton. The residence, built in 2020, comprises a two-storey structure with a total built area of approximately 22,969 square feet (“sq. ft.”) situated on a land area of 2.03 acres. The Subject Property has many amenities including an elevator, attached garage, detached garage, swimming pool enclosure and outdoor pool, library, and fitness room.

Issue 1 - What is the current value of the Subject Property for the 2021 and 2022 taxation year?

10Section 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.” For the 2021 and 2022 taxation years, the valuation date is January 1, 2016.

11For value comparison purposes, MPAC presented its valuation report dated September 9, 2022, which used the direct comparison approach including both actual and time-adjusted sale prices. Time-adjusted sale prices estimate the value of a sale as of the January 1, 2016, valuation date based on changes that occurred in the market between the actual sale date and the valuation date. MPAC relied on an analysis based on a median time-adjusted sale price per square foot of total built area of the property sale to determine the value of the Subject Property.

12MPAC submitted that, for value comparison purpose, it searched its corporate database for the closest property sales to the Subject Property with a quality of construction rating the same as the Subject Property’s rating of 9.5 (out of 10). MPAC found two properties: property sale #1 at 91 Rockmary Place in the City of Vaughan, and property sale #2 at 516 Indian Road in the City of Mississauga. While neither property is in the City of Brampton, like the Subject Property, MPAC took the position that the properties and the neighbourhoods shared similar characteristics to the Subject Property. MPAC submitted case law to support its use of property sales outside of the immediate neighbourhood and municipality of the Subject Property. The Board notes that the Appellant also included a property sale located in Mississauga in its evidence.

13MPAC asserted that one of the most important characteristics of a property for value comparison purpose is the quality of construction rating and as such chose it as its key metric in identifying its property sales.

14MPAC’s property sale #1 is located 16 kilometers from the Subject Property and consists of a total building area of 11, 288 sq. ft. compared to the Subject Property’s 22,969 sq. ft. and sits on a land area of 1.98 acres compared to the Subject Property’s 2.03 acres. It was built in 2007 with an attached garage and no pool, whereas the Subject Property was built in 2020 and has both an attached and detached garage and a swimming pool enclosure and outdoor pool.

15MPAC’s property sale #2 is located 28 kilometers from the Subject Property and consists of a total building area of 6,055 sq. ft. compared to the Subject Property’s 22,969 sq. ft. and sits on a land area of 0.55 acres compared to the Subject Property’s 2.03 acres. It was built in 1996 and has an effective year built of 2012 (due to renovations in 2015), whereas the Subject Property was built in 2020. It has an attached garage and an outdoor pool, whereas the Subject Property has both an attached and detached garage and a swimming pool enclosure and outdoor pool.

16The sale of the properties used by MPAC for value comparison purposes occurred within nine months of the valuation date with one occurring in June of 2016, and the other in September of 2016.

17In order to reflect the difference in the size of the site areas of each of the property sales when compared to the site area of the Subject Property, MPAC deducted the respective difference in land value between each of the property sales and the Subject Property from the time-adjusted sale price to arrive at a “modified” time-adjusted sale price. In determining current value, MPAC used the median time-adjusted sale price (modified by the difference in land values between the Subject Property and the respective property sale) per sq. ft. of total built area of the property sales and applied this figure to the total built area of the Subject Property resulting in a current value for the Subject Property of $13,537,000, rounded.

18MPAC testified that it obtained the land values of each of the property sales, as well as the Subject Property, from its corporate database.

19While MPAC did not provide the modified time-adjusted sale price per square foot of total built area for each of its two property sales, those figures are approximately $413.21 for property sale #1 and $765.34 for property sale #2 (calculated by dividing the modified time-adjusted sale price per square foot of built area by the total built area of the respective property as shown on MPAC’s valuation report, Appendix E, Market Grid Analysis).

20The Appellant presented evidence in the form of a spreadsheet, titled “Subject & Comparables Section 19”, consisting of six sale properties for valuation comparison purposes using actual sale prices (not adjusted for the timing of the sale). Five of the property sales are located in Brampton and one in Mississauga as follows: property sale #1 is located at 14 Bowman Avenue, Brampton; property sale #2, 9 Fitzpatrick Drive, Brampton; property sale #3, 2160 Portway Avenue, Mississauga; property sale #4, 10 Angelbiff Court, Brampton; property #5, 40 Eastview Circle, Brampton; and property sale #6, 27 Bellini Avenue, Brampton. The sale properties range in built area from 7,000 sq. ft. to 12,500 sq. ft. with lot areas ranging in size from 0.34 acres to 2.07 acres.

21The sale of the properties used by the Appellant for value comparison purposes occurred within a range of 23 months with earliest being June 2015 and the latest being May 2017.

22In determining current value, the Appellant calculated the median sale price per sq. ft. of total built area of the property sales as $347.15 and then applied this figure to the total built area of the Subject Property resulting in a current value for the Subject Property of $7,974,000, rounded.

23The sale price per sq. ft. of total built area calculated by the Appellant for its property sales ranged from $204.35 to $461.00.

24The Appellant’s spreadsheet provided limited information on the property sales used for value comparison purposes. It did not provide proximity to the Subject Property. Two properties were shown with a year built of 2010 and 2016 and one property was shown with a quality of construction of 8 (corrected at the hearing by the Appellant to 9). No other descriptive information was provided though the Appellant did include in its evidence a picture of each of the six properties.

25The Parties challenged the appropriateness of each other’s property sales given the wide variation in year built, land area, total building area, quality of construction, and proximity to the Subject Property. The Appellant argued that the quality of construction of the Subject Property could not be properly established without a visual inspection. MPAC submitted that it had not inspected the Subject Property due to COVID-19 restrictions but had reviewed architectural drawings and photographs of the Subject Property. MPAC also submitted that many details of the Appellant’s property sales were incorrect including various sale dates and total built areas though no evidence was provided by MPAC to support these assertions.

26A total of eight property sales were submitted by MPAC and the Appellant. The Board does not rely on 5 of these. Specifically, the Board does not rely on MPAC property sale #2 as the time-adjusted sale price per square foot of total built area of $765.34 is an outlier significantly above the other figures. Further, the Board does not rely on the Appellant’s property sale #1 and #2 as the respective sale price per square foot of total built area of $204.33 and $240.00 are also outliers significantly below the other figures. Further, the Board does not rely on the Appellant’s property sale #4 and #5 as these sales occurred in 2017 outside the shoulder years and as such are less reliable.

27Of the three remaining property sales, which the Board accepts as being the best available evidence for value comparison purposes, one of the properties sales is in Mississauga, one is in Vaughn – from the Appellant and MPAC, respectively, and the third is in Brampton – from the Appellant. One of the properties has a quality of construction of 8 (corrected to 9) and the other is 9.5, while the third has no quality of construction indicated by the Appellant. All of these properties are large, high-quality, custom-built homes. The sale price per square foot of total built area for these three property sales ranges from $404.90 to $428.57 with a median of $415.56. When the median figure is applied to the total built area of the Subject Property of 22,969 sq. ft. the resulting figure is $9,544,998.

28Neither Party disputed the Subject Property’s land value of $704,000.

Findings on Issue 1

29Based on the above analysis and the evidence received, the Board finds that the Subject Property’s current value for the 2022 taxation year is $9,544,000, rounded, and that the s. 33 omitted value of the Subject Property for the 2021 taxation year is $8,840,000 (the current value of the Subject Property less the associated land value of $704,000) ).

Issue 2 – Is an equity reduction in the current value required, and if so, how much?

30Section 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.

31The Assessment to Sales Ratio (“ASR”) is a tool used to determine whether a reduction of the assessment is required to make it equitable with the assessments of similar lands in the vicinity. The ASR is determined by dividing the assessment as returned by the time-adjusted sale price.

32The Appellant presented its equity analysis in the form of a spreadsheet titled “Subject & Comparables Vicinity Equity Section 44.” The spreadsheet listed three properties in Brampton with built areas ranging from 10,870 sq. ft. to 13,692 sq. ft. and lot sizes ranging from 2 acres to 2.25 acres. The Appellant calculated the median current value assessment (“CVA”) per square foot of these properties as $368.97 and applied it to the total built area of the Subject Property resulting in a “Estimated 2016 Base Year CVA of Subject” of $8,475,000, rounded. The Appellant took the position that this demonstrated that the assessment of the Subject Property of $9,511,000 was not equitable.

33In its equity analysis, the Appellant does not indicate on what basis its three properties were selected nor why only three properties are included in its analysis for equity purposes. Further, the Appellant does not include sale prices for the properties nor an analysis of assessment to sale prices.

34MPAC submitted its Equity Analysis Report. MPAC reviewed its corporate database to identify sales of property code 301: single-family detached (not on water), the same property code as the Subject Property, from 2015-01-01 to 2016-12-31 within 2.5 kilometres of the Subject Property. This resulted in a list of 30 properties. The resulting median ASR or level of assessment was 0.98 which is within MPAC’s acceptable target level of assessment of 0.95 - 1.05. MPAC also calculated the coefficient of dispersion (“COD”) at 9.1. The COD is measured by determining the average percentage deviation from the median ASR. MPAC argues that a COD of no more than 15 is acceptable for residential properties. MPAC submits that its ASR of 0.98 and COD of 9.1 indicate that similar properties in the vicinity have been assessed at or near their current values and therefore, an equitable adjustment is not required.

Findings on Issue 2

35The Board finds that the Appellant’s equity analysis is based on a very small set of datapoints (three) and lacks sufficient information to be useful. The Board prefers and accepts MPAC’s equity analysis which provides a fulsome analysis of similar properties in the vicinity of the Subject Property in accordance with the Act.

36The Board finds that an equitable reduction in the current value of the Subject Property is not required.

CONCLUSION

37The Board finds that the s. 33 omitted value of the Subject Property for the 2021 taxation year is $8,840,000 and that the Subject Property’s correct current value for the 2022 taxation year is $9,544,000 (rounded), and that an equity reduction is not required.

ORDER

38The Board orders that: (i) the s. 33 omitted assessment effective December 23, 2020 be cancelled, (ii) the s. 33 omitted value of the Subject Property for the 2021 taxation year be increased from $8,807,000 to $8,840,000, and (iii) the assessment of the Subject Property for the 2022 taxation year be increased from $9,511,000 to $9,544,000.