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As we wrote in our post What Does Equity Mean?, a statistics-based approach is a compelling way to show that the current value of a property should be adjusted downward on an equitable basis. Are there other compelling ways of showing that an inequity exists?
After determining a current value, the Assessment Review Board is directed by paragraph 44(3)(b) of the Assessment Act to “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”.
There is no legislated method for determining whether an equitable adjustment is warranted. The Act simply directs the Board to refer to the value of similar lands in the vicinity, without defining “similar” or “vicinity”. However, the Courts have provided some guidance on what each of those terms mean.
In Municipal Property Assessment Corporation v Loblaw Properties Limited, 2017 ONSC 1299 (CanLII), the Divisional Court reiterated that “the proper approach to determining what are “similar lands in the vicinity” is that set out by Saunders J. in Trizec, that is, that all points of comparison must be considered. I also agree with the point that he made, and which is of some importance to this case, that a single point of similarity, such as use, is not necessarily determinative of the issue.” (see para 25).
In Loblaw, the Board made an equity adjustment based on only two similar lands in the vicinity. Although the Divisional Court decision overturned the Board decision, it was not on the basis that only two properties were used. The Divisional Court held that the Board failed to look at how the assessed values of those two similar properties in the vicinity compared to their current values and then compare those ratios to the same ratio for the subject property (see para 30 and following). However, Divisional Court was clear that comparing assessments to properties’ current values “would certainly be one way, if not an obvious way, of determining whether similar properties were being similarly assessed for equitable purposes” (see para 35). There are therefore no legal barriers to showing an inequity with a low number of properties or in ways that do not include comparing assessments to sale values.
Vicinity generally means properties in the same geographic area. In Ontario Regional Assessment Commissioner, Region No. 3 v. Graham, 1993 CanLII 8621 (ON CA), the Court of Appeal held that vicinity must depend on the particular facts of a case and was as large as required to find similar properties. The Court of Appeal agreed with the Board’s statement that ““vicinity”, in appropriate circumstances, can mean an entire municipality, but may also mean a smaller portion thereof, depending on the appropriate geographical base that will yield meaningful comparables.” In special cases, the Board has found that a large area is the appropriate vicinity. For instance, in Resolute FP Canada Inc. v Thunder Bay (City), 2015 CanLII 38435 (ON ARB), the Board found that “vicinity“ included Ontario properties north of the French River when looking for similar large pulp mills (see para 83). That is more than half of the land in Ontario!
Can an equitable adjustment be made based on the assessment of one similar property in the vicinity? That is what the Board recently decided in Seidler v Municipal Property Assessment Corporation, Region 13, 2021 CanLII 22017.
In Seidler, the Appellant relied on the assessments of two nearby similar properties whereas MPAC relied on data from 30 sales in the broader neighbourhood. The Board found that, based on the high degree of similarity of one particular property by using all points of comparison, “the best evidence of equitable assessment is the assessment at [the one particular property]” (see para 27). The Board then adjusted the current value from $620,000 to $548,000 to match the assessment of that one other property. In this decision, the Board also recognizes that a sale price is not necessary to show that an equitable adjustment is warranted.
It is rare for the Board to rely on a single property for equity purposes. But there is no legal prohibition against it. It is plainly unfair if a nearly identical property is assessed significantly lower than how the property before the Board is assessed. You would need a very similar property to support that position, but Seidler indicates that the right property can prove such an unfairness.
NextGenLaw LLP has experience in addressing equity issues, including looking at equity in different ways. Contact NextGenLaw LLP to see if a reduction in your assessment is possible.
