Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: October 28, 2024 FILE NO.: WR 186992

Assessed Person(s): Carmelo Morra; Maureen Ann Morra Appellant(s): Carmelo Morra; Maureen Morra Respondent(s): Municipal Property Assessment Corporation Region 16 Respondent(s): Town of Wasaga Beach Property Location(s): 103 32ND Street North Municipality(ies): Town of Wasaga Beach Roll Number(s): 4364-010-001-57500-0000 Appeal Number(s): 3523291, 3523290 and 3525744 Taxation Year(s): 2022, 2023 and 2024 Hearing Event No.: 784877

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

APPEARANCES:

Parties	Counsel/Representative
Carmelo Morra; Maureen Morra	Self-represented
Municipal Property Assessment Corporation	Jenny Rose
Town of Wasaga Beach	No one appeared

HEARD: September 23, 2024 by video conference

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1Carmelo Morra and Maureen Morra, (the “Appellants”), owners of 103 32ND Street North (the “Subject Property”), appealed the 2022 and 2023 omitted assessments of the Subject Property to the Assessment Review Board (the “Board”) under s. 33 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on the ground that the assessments are too high. Pursuant to s. 40(26) of the Act, a further appeal was deemed for the 2024 taxation year.

2For the 2022 and 2023 taxation years, the Municipal Property Assessment Corporation (“MPAC”) assessed the Subject Property at $113,000 in the vacant land classification. These assessments were not appealed to the Board. MPAC then issued omitted assessments for the Subject Property at $536,000, effective December 15, 2022 and January 1, 2023. MPAC further assessed the Subject Property at $649,000 for the 2024 taxation year.

3The Appellants argued that the current value of the Subject Property should be $492,138.

4MPAC submitted that the correct current value of the Subject Property should be $565,000 without a further reduction to make the current value equitable with the assessments of similar properties in the vicinity.

5At the completion of the hearing, the Board reserved its decision.

Issues for the Hearing

6The issues to be determined are:

1. What is the correct current value of the Subject Property, as of the January 1, 2016 valuation day?
2. Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?
3. What is the correct value of the s. 33 omitted assessments for the 2022 and 2023 taxation years?

Result

7The Board finds that the correct current value of the Subject Property, as of the January 1, 2016 valuation day, is $613,000 (rounded).

8The Board finds that a downward adjustment of the current value to $528,000 (rounded) is necessary to ensure that the assessment of the Subject Property is equitable with the assessments of similar lands in the vicinity.

9Accordingly, the Board determines that the correct value of the s. 33 omitted assessments is $415,000 for the 2022 and 2023 taxation years effective December 15, 2022 and January 1, 2023.

ANALYSIS

Description of the Subject Property

10The Subject Property is a one-storey single-family detached (not on water) residential dwelling built in 2022 located in the Town of Wasaga Beach. It has a lot with 60 feet (“ft.”) of effective frontage and 144.98 ft. of effective depth for an effective site area of 0.2 acres. It has a total building area (“TBA”) of 2,061 square feet (“sq. ft.”), with construction quality of 7.0 and a basement area of 2,124 sq. ft. of which 1,854 sq. ft. is finished. The Subject Property has an attached garage with a TBA of 710 sq. ft. The Subject Property is a corner lot.

Issue 1 - What is the correct current value of the Subject Property, as of the January 1, 2016 valuation day?

11In accordance with s. 44(3)(a) of the Act, the first mandate of the Board is to 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.” That is, the Board must determine what the Subject Property would have sold for in an arm’s length transaction on the January 1, 2016 valuation day set by the Act.

12The best evidence the Board can receive of current value is an arm’s length and market-tested sale of the Subject Property on the valuation day or close to it. If no such transaction took place, the next best measure of current value is arm’s length and market-tested sales of comparable properties located nearby, as close as possible to the legislated valuation day of January 1, 2016.

MPAC’s Proposed Comparable Properties

13MPAC presented the Board with four proposed comparable property sales. These four proposed comparable property sales were improved with residences built between 2001 and 2008. Their effective site areas range from 0.14 to 0.25 acres and building sizes from 1,654 to 2,210 sq. ft. The quality of construction of the residences is between 6.5 and 7.5. These proposed comparable property sales sold within the shoulder years of the valuation day of January 1, 2016, which are 2015 and 2016. The details of MPAC’s proposed comparable property sales are in Table 1 below:

Table 1

Address	Assessment ($)	Sale Date & Sale Amt. ($)	Time-Adjusted Sale ($)	Building/ Size (sq. ft.)	Lot Size (Acres)	Year Built	Quality of Construction
Subject Property	103 32ND ST N	649,000	N/A	N/A	2,061	0.2	2022
Sale 1	23 6TH LANE	540,000	July 2016 (555,000)	511,199	2,054	0.14	2008
Sale 2	14 23RD ST N	496,000	October 2016 (630,000)	552,447	1,654	0.25	2001
Sale 3	42 22ND ST N	511,000	November 2016 (650,000)	560,400	2,210	0.17	2004
Sale 4	50 Dunkerron Avenue	569,000	January 2015 (625,000)	665,058	1,856	0.16	2003

14MPAC argued that property sales 1 to 3 are inferior to the Subject Property while property sale 4 is comparable with the Subject Property, the time-adjusted sale price range (“TASP”) of these four comparable properties is between $511,199 to $665,058 and that the correct current value of the Subject Property is $565,000.

15MPAC’s opinion of the correct current value of $565,000 was obtained by first deducting 10% from the assessed value of the Subject Property at $649,000, which provided a value of $584,100. The reason for this reduction, according to MPAC, is that the subject property is ‘over-built’, that it was over assessed being a new-built in a neighbourhood of older houses.

16Second, MPAC submitted that it changed the quality of construction of the Subject Property from 7.5 to 7.0 after the Appellants produced interior photographs of the Subject Property, since an interior inspection of the Subject Property had not been conducted. With this change, MPAC’s model provided a value of $565,000, which MPAC submitted is in line with the TASP range of the market sales in its evidence.

Appellants’ Proposed Comparable Properties

17The Appellants presented sales of several properties but focused on four properties. The Board did not review these proposed comparable property sales, as the Appellants did not provide the details of the sales and MPAC objected to the Board using any materials which were not disclosed prior to the hearing. This would be contrary to the principle of procedural fairness as provided in Rule 48 of the Board’s Rules of Practice and Procedure.

Findings on Issue 1 – Correct Current Value

18The Appellants argued that the Subject Property has a construction quality of 6.5 and not 7.0. They added that it has more features of a 6.0 home than a 7.0 home. Therefore, they concluded that it should be 6.5. They presented exterior photographs of homes that they believe have more superior features than the Subject Property but are assessed by MPAC as quality 6.5.

19The Board finds that the Subject Property has a quality of construction of 7.0. The Appellants did not provide interior photographs of the homes they assert as being superior with lower quality of construction of 6.5 for the Board to determine if MPAC assessed the Subject Property at a higher quality of construction, compared to these homes. Furthermore, the Appellants admitted during cross-examination that the Subject Property has some qualities of a home with a 7.0 quality of construction, which includes an open concept, an ensuite and vaulted ceilings. Moreover, MPAC’s assessor testified that earlier in the appeal process, upon a review of the interior photographs of the Subject Property provided by the Appellants, MPAC reduced the quality of construction from 7.5 to 7.0.

20The Board finds that MPAC’s proposed comparable property sales 3 and 4 are relatively comparable with the Subject Property, while comparable property sales 1 and 2 are inferior to the Subject Property. Therefore, in determining the correct current value of the Subject Property, the Board used MPAC’s comparable property sales 3 and 4.

21Comparable property sale 1 has a smaller lot size of 0.14 acres, a lower quality of construction of 6.5, a smaller basement area and garage, and it is 14 years older than the Subject Property and therefore inferior to the Subject Property. Although comparable property sale 2 has a slightly larger site area of 0.25 acres, its building is 407 sq. ft. smaller than the Subject Property, it has half a bathroom less than the Subject Property and a smaller basement and garage. This property is 21 years older than the Subject Property, therefore it is inferior to the Subject Property.

22Comparable property sale 3 has a similar lot size of 0.17 acres compared to the Subject Property, although its quality of construction is 6.5, it has more bathrooms than the Subject Property, and a similar building size of 2,210 sq. ft. Although its basement area and finished basement area are larger than the Subject Property, this is accounted for in the age of the Subject Property, which is 18 years newer. This makes this sale relatively comparable with the Subject Property. This property sold at a TASP of $560,400.

23Comparable property sale 4 has a slightly smaller lot size of 0.16 acres, and slightly smaller building and finished basement areas, this is offset by its higher quality of construction of 7.5 and larger basement area. This makes this property relatively comparable with the Subject Property. This property sold at a TASP of $665,058.

24The time-adjusted sale price range for property sales 3 and 4 is between $560,400 and $665,058. The mid-point of this range is $612,729. The Board finds that the correct current value of the Subject Property is $613,000 (rounded).

Issue 2 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be?

25Section 44(3)(b) of the Act directs that after determining current value,

… the Board shall,

(b) 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.

MPAC’s Evidence

26MPAC presented an equity analysis of 30 single-family detached (not on water) and seasonal/recreational dwelling first tier on water properties with sales that occurred from January 1, 2015 to December 31, 2016, within 4.0 kilometers of the Subject Property. MPAC submitted that the median Assessment to Sales Ratio (“ASR”) of the sales is 0.97. MPAC submitted that the International Association of Assessing Officers Standards states that the level of appraisal for all properties should fall between 0.90 and 1.10. MPAC takes the position that equity is achieved if the median ASR falls between 0.95 and 1.05.

27MPAC submitted that with a median ASR of 0.97, based on its equity analysis, equity has been achieved therefore, a reduction in the current value is not necessary.

Appellants’ Evidence

28The Appellants provided the Board with nine properties which they testified are similar to the Subject Property. The Appellants testified that they visited each of the properties and interviewed the owners and determined they were similar to the Subject Property. The Appellants provided the Board with their assessed land and building values, lot sizes and year built of these properties.

29The Appellants used the average assessed building value per sq. ft. (“psf.”) of the nine properties at $183.91 psf. against the total building area of the Subject Property at 2,061 sq. ft. and obtained a value of $379,038, which they submitted is the correct building value of the Subject Property. The Appellants further added this building value to the land value of the Subject Property provided by MPAC as $113,000 which they provided as a total value of $492,138, but the correct calculation is $492,038. The Appellants argued that the correct current value of the Subject Property is $492,138.

Findings on Issue 2 - Equity

30The Board finds that the Appellants provided the best evidence for an equity reduction.

31The parties provided different methodologies in the determination of whether an equity reduction is necessary. There is no particular way in arriving at this decision. As determined by the Divisional Court in Municipal Property Assessment Corporation v Schumacher et al., 2016 ONSC 3239 at para. 18 "Section 44(3)(b) does not specify any particular methodology."

32The Act requires that if the Board determines that the current value of the Subject Property is inequitable, when comparing it to the assessed values of similar properties in the vicinity, the Board can reduce the assessment to a value that is lower than the Subject Property’s current value.

33As determined by the Divisional Court in Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299 (“Loblaw”), applying the decision in Trizec Equities Ltd v Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182, 27 OAC 203, 37 MPLR 175, 8 ACWS (3d) 399 “…All points of comparison must be considered …”

34The properties MPAC used in its equity study included sales of seasonal/recreational dwellings - first tier “on water”. The Subject Property is not on water and was not assessed by MPAC as such, therefore some of these properties used by MPAC are not similar to the Subject Property. Consequently, the Board finds MPAC’s equity study unreliable and will not use it to determine if a reduction is necessary.

35The Appellants presented nine properties within the vicinity of the Subject Property which they testified have assessments lower than the Subject Property. The Appellants visited each of these properties and interviewed the owners. They submitted all are within the same location as the Subject Property, with similar quality of construction, year of construction, building and lot sizes, which are the five factors MPAC uses to assess properties.

36Although the Board prefers the Appellants’ evidence, the Board finds that the method used by the Appellants to arrive at an equitable value of $492,138 is flawed. The Appellants derived separate assessments for the building and land of these properties. These nine properties would not transact separately in the market, likewise the Subject Property.

37However, the Board used the assessed values of these nine properties, as assessed by MPAC, to determine if there should be a reduction in the current value of the Subject Property. Applying, the Loblaw edict that "... [a]ll points of comparison must be considered.“. The Appellants testified that they visited these properties and interviewed the owners. These properties are all single-family detached (not on water) dwellings, within the same location as the Subject Property and have similar lot and building sizes.

38The property with the highest assessed value of $614,000 is 98 32ND Street, with a lot size of 10,500 sq. ft., building size of 2,922 sq. ft. built in 2005. The lowest assessed value is 77 33RD Street North at $460,000, which has a lot size of 10,500 sq. ft. and a building size of 1,859 sq. ft. The Subject Property was built in 2022, with lot size 8,700 sq. ft. and building size 2,061 sq. ft. The nine properties have the following assessed values, which were not disputed by MPAC: $614,000, $470,000, $545,000, $540,000, $477,000, $535,000, $531,000, $584,000, and $460,000. This provides an indication of the range of the equitable value of the subject property.

39The average assessment of these nine properties is $528,444.44, the Board finds that the current value of the Subject Property should be reduced to this value $528,000 (rounded), as this is within the assessment of similar properties in the vicinity. In line with this, MPAC acknowledged that the Subject Property should have a 10% reduction for being overbuilt, which MPAC testified as being over assessed due to being a new-built property in a neighbourhood of older properties. However, this was an arbitrary reduction by MPAC’s former assessor assigned to the file. The Board determines that its equitable reduction is in line with MPAC’s reduction, as the year built of the nine properties presented by the Appellants range from 2003 to 2016.

Issue 3 – What is the correct value of the s. 33 omitted assessments for the 2022 and 2023 taxation year?

40MPAC issued omitted assessments for the Subject Property for the 2022 and 2023 taxation years effective December 15, 2022 and January 1, 2023, in the amount of $536,000. MPAC stated that the original 2016 current value assessment was $113,000 for only the land value.

Findings on Issue 3 – Correct Value of the 2022 and 2023 Omitted Assessments

41The Board determined that the correct equitable value of the Subject Property is $528,000 (rounded), therefore the Board finds that the correct s. 33 omitted assessments for the 2022 and 2023 taxation years is $415,000, which results from deducting the original land value assessment of $113,000 from the equitable value of $528,000.

CONCLUSION

42The Board finds that the correct current value of the Subject Property as of the valuation day of January 1, 2016 is $613,000 for the 2024 taxation year. The Board finds that this current value requires a downward adjustment to $528,000 (rounded), to ensure that the assessment of the Subject Property is equitable with the assessment of similar lands in the vicinity. Consequently, the correct value of the omitted assessments for the 2022 and 2023 taxation year is $415,000.

ORDER

43The Board orders that:

1. the current value of the Subject Property be reduced from $649,000 to the equitable value of $528,000 for the 2024 taxation year; and
2. the omitted assessments be reduced from $536,000 to $415,000 effective December 15, 2022 and January 1, 2023 for the 2022 and 2023 taxation years.