Tribunals Ontario

Tribunaux décisionnels Ontario

Assessment Review Board

Commission de révision de l’évaluation foncière

ISSUE DATE: July 31, 2024

FILE NO.: WR 186563

Assessed Person(s): M.C.; K.E.B.

Appellant(s): M.C.; K.E.B.

Respondent(s): West Lincoln Township

Property Location(s): Address Withheld

Municipality(ies): West Lincoln Township

Roll Number(s): Roll Number Withheld

Appeal Number(s): 3522761

Taxation Year(s): 2023

Hearing Event No.: 783499

Legislative Authority: Section 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25

APPEARANCES:

Parties

Representative

M.C.; K.E.B.

Self-represented

West Lincoln Township

No one appeared

HEARD: July 15, 2024 by video conference

ADJUDICATOR(S): Subuola Awoleri, Member

DECISION

OVERVIEW

1M.C. and K.E.B. (the “Applicants”) filed an application to the Town of West Lincoln (the “Town”) to have their 2023 property taxes reduced, cancelled or refunded because they were unable to pay these taxes due to either sickness or extreme poverty under s. 357(1)(d.1) of the Municipal Act, 2001, S.O. 2001, c. 25.

2The Town passed a by-law delegating its authority to determine such applications to the Assessment Review Board (the “Board”).

3At the completion of the hearing, the Board provided the Applicants with an oral decision. The Applicants thereafter requested written reasons for the oral decision.

Issues for the Hearing

4The issue to be determined is if the Applicants’ 2023 property taxes should be cancelled, reduced or refunded as a result of the Applicants’ inability to pay due to sickness or extreme poverty. This requires the Board to determine:

a. if the Applicants were unable to pay their property taxes;

b. if the Board finds that they were unable to pay their property taxes, the Board must determine if the inability to pay was due to either sickness or extreme poverty; and

c. if the Board determines that they were unable to pay due to sickness or extreme poverty, the Board must then decide on the amount of the property taxes levied in 2023 to be cancelled, reduced or refunded.

Result

5The Board finds that the Applicants were able to pay the property taxes levied on the Subject Property in 2023, and therefore dismisses this application.

ANALYSIS

Issue 1 – Were the Applicants able to pay their property taxes in 2023?

6A determination by the Board of the Applicants ability to pay their property taxes requires a contextual analysis of the Applicants income and expenses and an examination of all financial resources available to them in 2023. This will be used to determine if they could have mitigated their property tax obligation.

Income

7The Applicants’ sources of income include, disability benefits, old age security payments and other government benefits. The total undisputed monthly household income in 2023 was $3,558.07.

Expenses

8The Applicants’ undisputed monthly expenses in 2023 were $3,857.03. When subtracting the total monthly income from the monthly expenses, the net income is ($ -298.96).

9The Applicants’ monthly income and expenses are summarized in Table 1 below:

Table 1

Amount ($)

Income

3,558.07

Expenses

Mortgage

1,018.00

Home Insurance

183.24

Auto Insurance

134.13

Water

100.00

Heat

175.00

Hydro

30.00

Cell phone

16.66

Internet

113.00

Groceries

800.00

Household supplies

100.00

Gas

200.00

Meals outside the home

100.00

Car repairs/maintenance

200.00

Clothing

200.00

Recreation/Entertainment

100.00

Home repairs (roof, driveway)

200.00

2nd Mortgage

187.00

Total Monthly Expenses

3,857.03

Net Income

(-298.96)

Assets and Liabilities

10The current value assessment of the Subject Property provided by the Municipal Property Assessment Corporation as of January 1, 2016 is $436,000. The total undisputed assets of the Applicants was $436,000, and the total undisputed liability of the Applicants was $223,299.570. Subtracting this amount from the net asset of $436,000 provides a net worth of $212,700.43.

11The Applicants assets and liabilities in 2023 are summarized in Table 2 below:

Table 2

Assets

Amount ($)

Home (Current Value Assessment from MPAC)

436,000.00

Total Asset

436,000.00

Liabilities

Mortgage

192,299.57

2nd Mortgage

25,000.00

Credit Card

6,000.00

Total Liabilities

223,299.57

Net Asset (Total Assets Less Liabilities)

212,700.43

12The total property taxes levied on the Subject Property in 2022 was $5,482.22 excluding interest and penalties, which the Applicants paid in full in 2024, and are requesting a refund of this amount.

Findings on Issue 1

13In F.E.J.B. v Mississauga (City), 2019 CanLII 59502 (ON ARB) at para. 23, the Board clarified the two-stage analysis to be applied by the Board in its determination of inability to pay applications. The Board stated that:

…the Board finds that the framework for analysis should be adjusted as follows. If the Board finds there is an ability to pay, the application fails and there is no need to consider the second branch of analysis. However, if the applicant is able to demonstrate an inability to pay part or all of their property taxes, the Board must then determine whether this inability to pay was due to extreme poverty or sickness.

14This panel applied this two-stage analysis in making a determination in this Decision.

15Furthermore, in M. M. U. v Toronto (City), 2015 CanLII 46826 (ON ARB) at para. 21, the Board held that:

In order to qualify under this section of the Act, the Applicant is required to show that every reasonable effort has been made to pay all or part of the taxes. There is an expectation that to qualify for relief under this section of the Act the condition cannot be one where an individual simply cannot make ends meet but amounts to a situation where the Applicant after having called upon every resource available to him and having applied every reasonable means to mitigate and manage his expenditures is left with no means of being able to pay some or all of their property taxes.

16The Applicants argued that they did not have any financial resources to pay their property taxes and they only made this payment due to a requirement by the financial institution that refinanced the Subject Property in 2024.

17The Applicants testified that they borrowed the amount of $55,000 from a family member, specifically, one of the Applicant’s sister-in-law to pay off a second mortgage they obtained in 2023 from a private lending institution for the original amount of $8,500. They further added that due to the high interest rate, they had to pay back $9,200. They provided the Board with a breakdown of how this amount was spent in Table 3 below:

Table 3

Expense

Amount ($)

Easy Financial

9,289.94

Master Card

3,000.00

BMO Line of Credit

15,066.00

Enbridge Gas

738.00

Child’s Accommodation (Post-Secondary)

10,000.00

Child’s mattress

1,322.00

Payment to Child

3,000.00

TOTAL

42,415.94

18The total of these expenses was $42,415.94, although the Applicants testified it was $45,000. In reviewing the Applicants’ monthly bank account statements, on September 19, 2023, the amount of $51,123.87, was deposited into the account. The Applicants confirmed this was the amount borrowed from the family member.

19In addition to the expenses listed in paragraph 17, there were other expenses made from the amount borrowed. The Applicants had several purchases from Amazon, on October 7, 2023, the amount of $1,000 was withdrawn from the account and the Applicants were unable to explain the expense associated with this withdrawal.

20The end of year balance for December 2023, was ($-23.53), the Applicants testified that the balance of the money that was borrowed was used for living expenses. The Board notes that the monthly expenses were already accounted for against the monthly income, for a net income of ($-298.96).

21The Applicants secured a second mortgage in 2024, a part of these funds was used to pay the 2023 property taxes. The total amount disbursed to creditors from the second mortgage was $223,357.14. The Applicants testified that they still plan to repay part of the loan borrowed from the family member in 2023 from the second mortgage taken in 2024 and to repay the balance from the proceeds of a sale of the Subject Property, which will be listed for sale in five years.

22The Applicants argued that the amount borrowed was a loan to be repaid. The Applicants did not present any corroborating documentary evidence to support their testimony. In the Board’s Procedural Order (DM 186348) issued May 28, 2024, the Board ordered the Applicants to provide several supporting documents including:

Evidence of any money owing is required for the period from December 2022 to January 2024, including for credit cards, mortgages, lines of credit or other loans held by any person or company, outstanding credit card balances, unpaid support amounts owing to any person and other debts [Emphasis added.]

23The onus rests on the Applicants to prove that they had the inability to pay their property taxes.

24At the time of the hearing, the Applicants confirmed that no payment had been made towards the repayment of the amount borrowed from the family member. Consequently, in the absence of any corroborating evidence showing that the amount borrowed was a loan to the Applicants, the Board finds that part of this money was additional financial resources available to the Applicants to pay their property taxes. see A.E. v Toronto (City), 2023 CanLII 97688 (ON ARB) at paras. 7 and 8 and J.B. v Toronto (City) 2023 CanLII 116922 (ON ARB) at para. 12.

25A review of the Applicants monthly bank account statements further reveals that there were several electronic transfers from the Applicants bank account to pay credit card balances. In another bank account an average amount of $450 each month was transferred to the Applicants’ child. Property tax payment is of utmost priority.

26In S.C. v Whitby (Town of), 2016 CanLII 11169 (ON ARB) at para. 37 the Board determined that:

In the Board’s view the threshold for individuals who claim an inability to pay their property taxes because of sickness cannot simply be that the individuals are unable to make ends meet. The individuals must demonstrate that after having called upon every resource available to them and having explored every reasonable opportunity to mitigate their financial stresses, they have no means of being able to pay some or all of their property taxes. In addition, the individuals must demonstrate that they have taken steps and explored every reasonable opportunity to manage their debts and mitigate their financial situation. The Board is of the view that the Act envisages that an individual seeking relief on application under s. 357(1)(d.1) of the Act should clearly demonstrate that for the year under appeal the Applicants had no resources available to meet their obligations to provide for the basic necessities of living and at the same time pay some or all of his/her property taxes.

27In E. B. v Toronto (City), 2016 CanLII 45380 (ON ARB), paras. 19 and 20, the Board determined that:

These applications are of last resort and the Applicant must have depleted all resources before making such an application.

The Applicant must demonstrate in her applications, that after managing her resources and expenditures, she has no further resources to meet the basic necessities of life in addition to paying all or some of her property taxes.

28An order to refund the total property taxes paid in the amount of $5,482.22 would be unreasonable, as this would be akin to allowing the Applicants to repay their line of credit (BMO LOC of $15,066) and credit cards, and other discretionary expenses while other taxpayers make this payment. As the Board stated in A. P. v Toronto (City), 2018 CanLII 70339 (ON ARB), affirmed by RD 2019M01 in A.P. v Toronto (City), 2019 CanLII 3422 (ON ARB), where the Board referred to the decision in N.H. v. Municipal Property Assessment Corp. Region No. 9, [2009] O.A.R.B.D. No. 1 that – “what is forgiven to one taxpayer is of necessity charged to all other taxpayers.”

29The Board finds that the Applicants could have called upon every financial resource available to them to pay their 2023 property taxes, which was paid in 2024.

30Having determined that the Applicants were able to pay the property taxes in 2023, the Board does not need to consider whether the Applicants were in a condition of sickness or extreme poverty.

CONCLUSION

31The Board finds that the Applicants were able to pay all their property taxes in 2023.

ORDER

32The Board orders that this application for reduction, cancellation or refund of the 2023 property taxes is dismissed.