Tribunals Ontario
Tribunaux décisionnels Ontario
Assessment Review Board
Commission de révision de l’évaluation foncière
ISSUE DATE: December 30, 2024
Assessed Person(s): Raymond Charles Kelly; Shelley Marie Kelly
Appellant(s): Raymond Kelly; Shelley Kelly
Respondent(s): Municipal Property Assessment Corporation Region 18
Respondent(s): Town of Pelham
Property Location(s): 180 Port Robinson Road, Unit 53
Municipality(ies): Town of Pelham
Roll Number(s): 2732-030-020-07010-0000
Appeal Number(s): 3527446
Taxation Year(s): 2024
Hearing Event No.: 785579
Legislative Authority: Section 40 of the Assessment Act, R.S.O. 1990, c. A.31
APPEARANCES:
| Parties | Counsel/Representative |
|---|---|
| Raymond Kelly; Shelley Kelly | Self-represented |
| Municipal Property Assessment Corporation | Steven Xu |
| Town of Pelham | No one appeared |
HEARD: December 12, 2024 by video conference
ADJUDICATOR(S): Subuola Awoleri, Member
DECISION
OVERVIEW
1Raymond Kelly and Shelley Kelly, (the “Appellants”) owners of 180 Port Robinson Road, Unit 53 (the “Subject Property”), appealed the 2024 assessment of the Subject Property to the Assessment Review Board (the “Board”) under s. 40 of the Assessment Act, R.S.O. 1990, c. A.31 (the “Act”) on the ground that the assessment is too high.
2The Appellants argued that the current value of the Subject Property should be $332,000.
3The Subject Property was assessed by the Municipal Property Assessment Corporation (“MPAC”) at $396,000 for the 2024 taxation year. MPAC submitted that based on market sales the current value of the Subject Property should be confirmed as returned at $396,000, without a further reduction to make the current value equitable with the assessments of similar properties in the vicinity.
4A representative for the Town of Pelham attended the hearing only as an observer.
Issues for the Hearing
5The issues to be determined are:
What is the correct current value of the Subject Property, as of the January 1, 2016 valuation day?
Is the current value as determined by the Board equitable in reference to the assessments of similar lands in the vicinity?
Result
6The Board finds that the correct current value of the Subject Property, as of January 1, 2016, valuation day, is $396,000 (rounded).
7The Board finds that a downward adjustment to the current value to $348,000 is necessary to ensure that the assessment of the Subject Property is equitable with the assessments of similar lands in the vicinity.
8The Board reduces the assessment of the Subject Property from $396,000 to $348,000 for the 2024 taxation year.
ANALYSIS
Description of the Subject Property
9The Subject Property is a vacant land condominium (residential improved) built in 2019, located in the Town of Pelham. It has a lot with 39.27 feet of effective frontage and 78.77 feet of effective depth for an effective lot area of 0.07 acres. It has a total building area (“TBA”) of 1,411 square feet (“sq. ft”.), with construction quality of 7.0 and a basement area of 1,411 sq. ft. of which 1,128 sq. ft. is finished.
Issue 1 - What is the correct current value of the Subject Property, as of the January 1, 2016 valuation day?
10In 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.
11The 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
12MPAC presented the Board with three proposed comparable property sales. These three proposed comparable property sales were improved with residences built between 2011 and 2014. Their effective site areas range from 0.06 to 0.07 acres and building sizes from 1,547 sq. ft. to 1,607 sq. ft. The quality of construction of the residences is 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 | 180 Port Robinson Road Unit 53 | 396,000 | N/A | N/A | 1,411 | 0.07 | 2019 | 7.0 |
| Sale 1 | 1054 Line Ave. Unit 2 | 374,000 | October 2016 (475,000) | 430,072 | 1,547 | 0.06 | 2014 | 7.5 |
| Sale 2 | 1054 Line Ave. Unit 7 | 402,000 | November 2015 (449,000) | 456,530 | 1,586 | 0.07 | 2012 | 7.5 |
| Sale 3 | 1054 Line Ave. Unit 5 | 393,000 | July 2016 (475,000) | 443,313 | 1,607 | 0.07 | 2011 | 7.5 |
13MPAC argued that all three comparable properties are similar to the Subject Property with the following time-adjusted sale prices per square foot (“psf”): $278.00, $287.85, and $275.86, with an average rate psf of $280.57. MPAC multiplied this rate by the Subject Property’s TBA of 1,411 sq. ft., which MPAC calculated to be $395,889. MPAC submitted that the current value of the Subject Property is $396,000 (rounded).
14The Appellants did not present their own proposed comparable properties, which sold within the shoulder years of January 1, 2016. The Appellants made two submissions, arguing that the properties used in their submissions have assessments lower than the Subject Property with higher quality of construction of 7.5 and the other with the same quality of construction of 7.0 as the Subject Property.
15In the first submission, the Appellants used 10 properties on 1054 Line Avenue. These properties have the same structure as the Subject Property, which is vacant land condominium (residential improved). The Appellants used the 2016 assessments of these properties and divided them against their TBAs to obtain a value of $2,478, which was divided by 10, to provide a value of $247 psf. The Appellants submitted that for properties with higher quality of construction, their assessments are lower than the Subject Property.
16For the second submission, the Appellants used 12 properties, 10 from 3232 Montrose Road and two from 6334 Desanka Avenue. These properties are not within the Town of Pelham but in Niagara Falls City, approximately 10 kilometers from the Subject Property. Four of these properties sold within the shoulder years of January 1, 2016. However, the Appellants did not use the sales to derive the current value of the Subject Property. The Appellants argued that these 12 properties are most comparable with the Subject Property since they all have a quality of construction of 7.0. The Appellants used the assessed value of each of these properties and divided them against their TBAs, which provided a value of $2,818, which was divided by 12 to provide a value of $235 psf. The Appellants multiplied this rate against the TBA of the Subject Property to provide a value of $332,000. The Appellants submitted that the current value of the Subject property is $332,000.
Findings on Issue 1 – Correct Current Value
17The Board finds that the Appellants’ approach in deriving the current value of the Subject Property is not in line with the definition of current value in the Act. Section 19 of the Act provides that the assessment of land shall be based on its current value. MPAC provides the assessed values of properties, using its model to make an estimation, since most properties would not have been sold on the valuation day of January 1, 2016. This is what is referred to as the assessed value of the Subject Property, i.e., the value that was entered on the assessment roll.
18Current value is the market value of the Subject Property as defined under s. 1 of the Act. The Appellants relied on assessed values of comparable properties, whereas the Board’s determination of the correct current value of the Subject Property requires evidence of the market value of the comparable properties. A sale price is evidence of value, but an assessed value is not, as properties may be over or under-assessed. Consequently, the Board finds that the assessed values of these 12 properties do not assist the Board in determining the correct current value.
19The Appellants’ four properties that sold within the shoulder years are: 3232 Montrose Road, Unit 24 and Unit 30, 6334 Desanka Avenue, Unit 14 and Unit 17, all located in Niagara Falls City and not within the Town of Pelham. The Board did not use these properties to determine the correct current value of the Subject Property, since they are not located within the same neighbourhood as the Subject Property. The Appellants testified that they are approximately 10 kilometers from the Subject Property. The Board finds that they are not exposed to the same market force as the Subject Property and therefore not comparable with the Subject Property.
20The Board finds that MPAC’s three proposed comparable property sales are similar with the Subject Property. These three proposed comparable property sales are all vacant land condominium (residential improved), one-storey buildings like the Subject Property. Although they are all half a quality higher than the Subject Property, the Subject Property is newer than these three comparable property sales. MPAC and the Appellants both testified that there was no vacant land condominium (residential improved) with quality of construction 7.0, that sold within the shoulder years of January 1, 2016, within the Town of Pelham. All MPAC’s proposed comparable properties are all within 2.0903 kilometers from the Subject Property. Comparable property Sale 3 has a larger building of 1,607 sq. ft., however due to economies of scale, its rate psf of $275.86 is the lowest. Property Sales 2 and 3 have the same lot size of 0.07 acres as the Subject Property. These three proposed comparable properties all have attached garages like the Subject Property, with similar sizes.
21The Board finds that MPAC’s method of deriving the current value of the Subject Property using the average rate psf of its three comparable properties at $280.57, multiplied by the TBA of the Subject Property at 1,411 sq. ft. to arrive at a value which the Board correctly calculated as $395,884.27 is reasonable.
22The Board determines the correct current value of the Subject Property to be $396,000 (rounded)
Issue 2 - Whether there should be an equitable reduction of the current value pursuant to [s. 44(3)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html#sec44subsec3_smooth)(b) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-a31/latest/rso-1990-c-a31.html), and, if so, what the amount of this reduction should be?
23Section 44(3)(b) of the Act directs that after determining current value,
… the Board shall,
(b) have reference to the value at which similar lands in the vicinity are assessed and adjust the assessment of the land to make it equitable with that of similar lands in the vicinity if such an adjustment would result in a reduction of the assessment of the land.
24MPAC presented an equity analysis of 30 vacant land condominium (residential-improved) sales that occurred from January 1, 2015 to December 31, 2016, within 12.0 kilometers of the Subject Property.
25MPAC submitted that the median Assessment to Sales Ratio (“ASR”) of the sales is 0.95. MPAC submitted that the International Association of Assessing Officers standards states that the level of appraisal for all properties should fall between 0.90 and 1.10. MPAC takes the position that equity is achieved if the median ASR falls between 0.95 and 1.05.
26MPAC submitted that with a median ASR of 0.95, based on its equity analysis, equity has been achieved, therefore, a reduction to the current value is not necessary.
27The Appellants’ evidence consisted of two submissions. In the first submission, the Appellants used 10 properties on 1054 Line Avenue, all located in the Town of Pelham. These properties have the same structure vacant land condominium (residential improved) as the Subject Property but with a higher quality of construction of 7.5. The details of these properties can be found in Table 2 below:
Table 2
| Address | Assessment ($) | Building/Size (sq. ft.) | Lot Size (sq. ft.) | Year Built | Quality of Construction | |
|---|---|---|---|---|---|---|
| Subject Property | 180 Port Robinson Road | 396,000 | 1,411 | 3,049.2 | 2019 | 7.0 |
| 1 | 1054 Line Avenue Unit 1 | 403,000 | 1,589 | 2,905 | 2012 | 7.5 |
| 2 | 1054 Line Avenue Unit 2 | 374,000 | 1,547 | 2,667 | 2014 | 7.5 |
| 3 | 1054 Line Avenue Unit 3 | 383,000 | 1,551 | 2,667 | 2014 | 7.5 |
| 4 | 1054 Line Avenue Unit 4 | 404,000 | 1,617 | 3,003 | 2013 | 7.5 |
| 5 | 1054 Line Avenue Unit 5 | 393,000 | 1,607 | 2,922 | 2011 | 7.5 |
| 6 | 1054 Line Avenue Unit 7 | 402,000 | 1,586 | 3,090 | 2012 | 7.5 |
| 7 | 1054 Line Avenue Unit 8 | 393,000 | 1,603 | 2,639 | 2013 | 7.5 |
| 8 | 1054 Line Avenue Unit 9 | 379,000 | 1,603 | 2,637 | 2013 | 7.5 |
| 9 | 1054 Line Avenue Unit 10 | 395,000 | 1,578 | 2,637 | 2012 | 7.5 |
| 10 | 1054 Line Avenue Unit 11 | 378,000 | 1,451 | 2,808 | 2013 | 7.5 |
28The Appellants submitted that these 10 properties with higher quality of construction have an average assessment psf of $247, which is lower than the assessment of the Subject Property.
29In the Appellants’ second submission all their 12 properties are located in the Niagara Falls City. The Appellants derived a rate psf of $235 using the assessments of these properties divided by their total building areas.
Findings on Issue 2 – Equity
30The 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. Therefore, an equitable reduction should only be made where there is clear evidence to support that such a reduction is warranted.
31The Ontario Divisional Court in Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299, (“Loblaw”) determined at para. 23:
The reference to "many points of comparison" is of interest because it mirrors wording used in a later judgment of this court, namely, Trizec Equities Ltd. v. Ontario (Regional Assessment Commissioner, Region No. 27), [1988] O.J. No. 182 (Div. Ct.). In that decision, Saunders J. was faced with the same issue, that is, what constitutes similar properties. He referred to the decision in Downtown Oshawa and found that, based on that decision, the Board was required to "consider all points of comparison". Saunders J. then concluded on the issue by saying:
All points of comparison must be considered. The Board must make a factual finding based on such a consideration. One point of similarity such as use may be, but is not necessarily, determinative. Some similarities may be overridden by other characteristics and some differences may be subordinated.
32MPAC testified that only three of its properties in its equity study are located in the Town of Pelham, all the other properties are located in Niagara Falls City. MPAC did not use any property located outside the Town of Pelham to derive the current value of the Subject Property as MPAC testified that these other properties have exposure to different markets. The Appellants also used properties in Niagara Falls City in their second submission. The Board finds that the best evidence to determine if an equity adjustment is warranted is to use properties located in the Town of Pelham, where the Subject Property is located, since they will be exposed to the same market force.
33The Appellants, in their first submission, used properties located in the Town of Pelham. These 10 properties have a higher quality of construction than the Subject Property. The assessments of three properties are within the range of the determined current value of the Subject Property: 1054 Line Avenue Units 5, 8 and 10, with assessments ranging from $393,000 - $395,000. They all have larger buildings than the Subject Property with a range from 1,578 sq. ft. to 1,607 sq. ft., although their lot sizes are smaller with a range of 2,637 sq. ft. to 2,922 sq. ft. However, these properties have a higher quality of construction than the Subject Property, yet the Subject Property’s determined current value is higher at $396,000.
34Furthermore, the average and median ASR of MPAC’s three comparable properties (1054 Line Avenue Units 2, 7, and 5) used by MPAC to derive the current value of the Subject Property, which MPAC also used in its equity analysis is 0.88. These three properties are located in the Town of Pelham. This further reveals that a downward adjustment is required to the Subject Property’s determined current value. Consequently, the Board used these three proposed comparable properties to determine that an equity reduction is necessary to the determined correct current value. These three comparable properties were also included in the Appellants’ first submission.
35The Board finds that these three properties are sufficiently similar to the Subject Property for determining the Subject Property’s equitable value. Applying, the Loblaw edict that "... [a]ll points of comparison must be considered”, they are all vacant land condominium (residential improved), they are all within 2.0903 kilometers of the Subject Property and used as residential. Furthermore, two of these sales have the same lot size as the Subject Property, with similar building sizes. Their assessed values range from $374,000 to $402,000. They have the following ASRs: 0.87, 0.88, 0.89. The average and median ASR for these three properties is 0.88, which suggests that an equitable reduction is appropriate.
36In Re Empire Realty Co. Ltd. and Assessment Commissioner for Metropolitan Toronto et al., 1968 CanLII 183 (ON CA) ("Empire Realty") the Ontario Court of Appeal provides the main objective of municipal taxation as:
... the equitable distribution of the burden according to the value of the property possessed by each ratepayer; in the system prevailing in Ontario, the tax levied on the ratepayer is determined by the application of a uniform mill rate upon the assessed value of the ratepayer's taxable property set down in the assessment roll. If equity in taxation is to be achieved, it must result from equity in assessment.
37The Court further addressed equity in assessment by stating that:
... an assessment made at the actual value of lands and buildings in compliance with the provisions of s. 35(1) would be an unequitable assessment if all similar lands in the vicinity were assessed at some percentage of actual value substantially less than one hundred ... (Emphasis added.)
38MPAC’s median and average ASR of these three properties at 0.88, is substantially below 1.00. Consequently, the evidence leads the Board to make a downward adjustment for equity to the determined correct current value of $396,000, which is: $396,000 x 0.88 = $348,480 or $348,000 (rounded).
39Accordingly, the Board finds that the equitable value of the Subject Property is $348,000 (rounded).
CONCLUSION
40The Board finds the correct current value of the Subject Property for the 2024 taxation years is $396,000 (rounded). The Board finds that a downward adjustment to $348,000 (rounded) is necessary for the current value to be equitable with the assessments of similar properties in the vicinity.
ORDER
41The Board orders that the assessment of the Subject Property is reduced from $396,000 to $348,000 for the 2024 taxation year.
“Subuola Awoleri”
SUBUOLA AWOLERI
MEMBER
Assessment Review Board
Website: www.tribunalsontario.ca/arb