Decision and Order
IN THE MATTER OF AN APPEAL PURSUANT TO S. 50 OF THE ASSESSMENT ACT
CONCERNING:
Kimberly Voth
Kenneth Neufeld
Calligan Avenue Holding Co Ltd
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Assessor Of Area #15 - Fraser Valley Office
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Appeal No.: |
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Refer to as: |
Voth et. al. v. Area 15 (2010 PAABBC 20092093) |
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Date of Decision: |
January 19, 2010 |
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Properties: |
See Schedule A |
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Heard: |
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Submissions: |
From the Appellants, received November 6, 2009 |
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From the Respondent, received December 1, 2009 |
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Board Panel: |
Sheldon Seigel, Panel Chair |
INTRODUCTION
[1] The properties under appeal consist of a number of units in a single residential strata condominium project. The project was under construction and partially complete as of October 31, 2007, the state and condition date for the 2008 assessment roll. The project was complete as of October 31, 2008, the state and condition date for the 2009 assessment, which assessment is the subject of this appeal.
[2] The Appellants say that the value for the 2009 assessment should reflect the condition of the properties as of October 31, 2008, but with the same valuation inputs used for the 2008 assessment (which has the stated and condition date of October 31, 2007). The Assessor changed the rates and adjustments used in the valuation model for the 2009 assessment.
[3] There have been three appeal management conferences and the record includes letters from each. The dates of the conferences and the reporting letters are: July 7, 2009, September 1, 2009, and October 8, 2009. The reporting letters clearly set out that this matter turns on the interpretation of the Economic Incentive and Stabilization Statutes Amendment Act (Bill 45) (see Schedule “B”). In the reporting letter of October 8, 2009, the Board requests that the parties provide an Agreed Statement of Facts and two agreed values; one to be used if the Assessor’s interpretation of Bill 45 is found to be correct and one to be used if the Appellants’ interpretation is found to be correct.
[4] The issue is whether the properties are assessed at actual value for the 2009 assessment.
[5] There is no dispute that the appropriate valuation date for the properties for the 2009 assessment, is July 1, 2007, the same valuation date as the 2008 assessment roll. However, the 2009 assessed value is not the same as the 2008 assessed value as the buildings were not fully constructed for the 2008 assessment, and because BC Assessment has applied a higher, “excellent quality” unit rate to the improvements for the 2009 assessment than the “average quality” unit rate used in the 2008 assessment. The Appellants say that this violates Bill 45. The issue is whether or not Bill 45 allows changes to the assessment inputs used to value the properties for the 2008 roll other than to show that the properties were complete as of October 31, 2008.
Evidence
[6] The Appellants provide a one page written submission dated November 6, 2009, as well as the Notice of Appeal dated April 30, 2009. In addition, the parties filed an Agreed Statement of Facts on October 28, 2009.
[7] The Agreed Statement of Facts sets out the following:
[8] The Appellants say that the Assessor valued the properties with their standardized mass appraisal statistical modeling program for residential stratified properties using an “average quality” unit rate for the 2008 roll, but for the 2009 roll the Assessor applied an “excellent quality” unit rate, thereby increasing the valuations by 11%. The Appellants argue that the intention of Bill 45 was to ensure that, where a property was incomplete as at October 31, 2007 and was complete as at October 31, 2008, the Assessor must value the property using the same assessment valuation inputs for both rolls.
[9] The Assessor provides written submissions dated December 1, 2009. In addition, the Assessor produced an October 15, 2009 email that includes an Excel spreadsheet showing the calculation of numerical value for each unit in these appeals and the inputs that produced those values for the 2008 roll. The Assessor sets out that he used inputs of 70% completion, average quality level of finish, and individual unit adjustments for size and floor level to arrive at a price per square foot (SF) range of $236/SF to $285/SF. The Assessor says the construction finish did not exist on October 31, 2007 and the complex was, therefore, valued as average quality. Upon inspection of the completed complex on October 31, 2008, the construction finish was of a better than average quality and the assessed value for the 2009 roll reflects the actual physical condition of the units. He also says that the valuation of the properties is equitable when compared to other similar properties in the area that were under construction in 2007 and completed in 2008 and is at an average of 90% assessment to sales ratio for both 2008 and 2009 sales.
Decision
[10] There have been no Board decisions on the interpretation of Bill 45. The legislation states that a market value should be arrived at as of July 1, 2007 and as of July 1, 2008 and the value on the 2009 roll should be the lower of the two. Bill 45 indicates that the value is dependent on the condition of a property as of October 31, 2008. Bill 45 is silent on whether this value allows for an increase in adjustment parameters to reflect the quality of a finished product. I see nothing in the plain language of Bill 45 that binds the Assessor to determine the quality of the improvements that have changed as of October 31, 2008 for the 2009 roll at the same level as was shown on the 2008 roll.
[11] On October 31, 2007, the properties were partially completed. With no interior finishing to view, the Assessor calculated the value of the units for the 2008 assessment roll on the basis of them being finished to an average quality. Absent evidence to the contrary, that seems to be a reasonable conclusion. On October 31, 2008, the properties were fully completed and the Assessor was able to determine that the actual quality of finish was above average for purpose of the 2009 assessment roll.
[12] Bill 45 requires the date for determining the physical condition and permitted use of a property to be October 31, 2008. That is the date the Assessor used for the 2009 assessment.
[13] The project was completed by October 31, 2008 and the Assessor was obligated to evaluate the physical condition on that date. The physical condition on that date was different from what it was on October 31, 2007. The Assessor was obligated to consider not only the state of completion of the improvements (from partially to fully constructed) but also the quality of finish as at October 31, 2008. There is no evidence that the term “physical condition” is restricted to the state of completion of the improvement. I find a reasonable interpretation of Bill 45 allows reference, where relevant, to the quality of the improvements observed if the quality and condition of the improvement is different from what is was on October 31, 2007. As the quality (deemed to be average) was different from that of the uncompleted improvements on October 31, 2007, the Assessor was obliged to reflect the actual condition of the improvements, including quality in the 2009 assessment. To find otherwise would be to find that Bill 45 restricts the Assessor’s ability to reflect the actual physical condition of a property for the 2009 assessment whether that condition is better or worse than it was on October 31, 2007. This is contrary to a reasonable reading of the whole of Bill 45, which uses only October 31, 2008 for the 2009 assessment as the state and condition date, notwithstanding that it specifically refers to July 31, 2007 and July 31, 2008 as alternative dates for valuation of a property.
[14] Although, the Assessor does not provide data in support of his assertion that the properties are equitably assessed and at an average of 90% assessment to sales ratio for 2008 and 2009, there are no submissions to the contrary from the Appellants and I accept this as evidence that the properties are equitably assessed.
ORDER
[15] The Board confirms the decision of the 2009 Property Assessment Review Panel. Although the parties agreed to a total value of $8,068,000 for 28 appealed units, there are actually 31 folios and the Assessor is seeking a confirmation. Therefore, the Review Panel’s decisions on all 31 folios are confirmed as per the attached Appendix “B”.
Schedule A
Voth et. al. v. Area 15
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ROLL NUMBER |
CLASS |
LAND |
IMPROVEMENT |
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15-42-312-31461-0001-0 |
Class 1 – Residential |
$148,000 |
$106,000 |
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15-42-312-31461-0004-0 |
Class 1 – Residential |
$198,000 |
$139,000 |
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15-42-312-31461-0005-0 |
Class 1 – Residential |
$198,000 |
$139,000 |
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15-42-312-31461-0014-0 |
Class 1 – Residential |
$142,000 |
$118,000 |
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15-42-312-31461-0015-0 |
Class 1 – Residential |
$141,000 |
$123,000 |
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15-42-312-31461-0016-0 |
Class 1 – Residential |
$142,000 |
$130,000 |
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15-42-312-31461-0030-0 |
Class 1 – Residential |
$143,000 |
$118,000 |
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15-42-312-31461-0031-0 |
Class 1 – Residential |
$141,000 |
$124,000 |
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15-42-312-31461-0032-0 |
Class 1 – Residential |
$142,000 |
$131,000 |
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15-42-312-31461-0047-0 |
Class 1 – Residential |
$150,000 |
$118,000 |
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15-42-312-31461-0048-0 |
Class 1 – Residential |
$150,000 |
$118,000 |
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15-42-312-31461-0050-0 |
Class 1 – Residential |
$150,000 |
$126,000 |
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15-42-312-31461-0052-0 |
Class 1 – Residential |
$217,000 |
$145,000 |
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15-42-312-31461-0057-0 |
Class 1 – Residential |
$152,000 |
$86,000 |
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15-42-312-31461-0064-0 |
Class 1 – Residential |
$136,000 |
$78,000 |
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15-42-312-31461-0065-0 |
Class 1 – Residential |
$154,000 |
$118,000 |
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15-42-312-31461-0068-0 |
Class 1 – Residential |
$155,000 |
$126,000 |
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15-42-312-31461-0069-0 |
Class 1 – Residential |
$145,000 |
$104,000 |
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15-42-312-31461-0071-0 |
Class 1 – Residential |
$197,000 |
$141,000 |
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15-42-312-31461-0072-0 |
Class 1 – Residential |
$209,000 |
$148,000 |
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15-42-312-31461-0074-0 |
Class 1 – Residential |
$144,000 |
$101,000 |
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15-42-312-31461-0075-0 |
Class 1 – Residential |
$142,000 |
$119,000 |
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15-42-312-31461-0076-0 |
Class 1 – Residential |
$142,000 |
$119,000 |
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15-42-312-31461-0079-0 |
Class 1 – Residential |
$197,000 |
$141,000 |
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15-42-312-31461-0080-0 |
Class 1 – Residential |
$209,000 |
$148,000 |
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15-42-312-31461-0082-0 |
Class 1 – Residential |
$144,000 |
$101,000 |
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15-42-312-31461-0083-0 |
Class 1 – Residential |
$142,000 |
$118,000 |
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15-42-312-31461-0084-0 |
Class 1 – Residential |
$142,000 |
$119,000 |
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15-42-312-31461-0091-0 |
Class 1 – Residential |
$149,000 |
$119,000 |
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15-42-312-31461-0092-0 |
Class 1 – Residential |
$226,000 |
$156,000 |
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15-42-312-31461-0099-0 |
Class 1 – Residential |
$153,000 |
$119,000 |
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TOTAL VALUE |
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$5,000,000 |
$3,796,000 |
$8,796,000 |
Schedule B
Voth et. al. v. Area 15
BILL 45 — 2008
ECONOMIC INCENTIVE AND STABILIZATION STATUTES AMENDMENT ACT, 2008
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
Part 3 — Property Value Assessment
Definitions
23 Definitions in the Assessment Act apply to this Part.
Valuation of property for 2009 taxation year
24 (1) In this section:
"2007 value", in relation to a property, means the actual value of the property as determined under section 25;
"2008 value", in relation to a property, means the actual value of the property as determined under the Assessment Act for the 2009 taxation year as if this Part of this Act were not in force.
(2) Despite the Assessment Act, the actual value of a property for an assessment roll for the 2009 taxation year is the lesser of
(a) the 2007 value of the property, and
(b) the 2008 value of the property.
(3) This section does not apply in respect of properties to which one or more of sections 20 to 24 of the Assessment Act apply, except land that is valued under section 19 of that Act.
Determination of "2007 value"
25 (1) For the purposes of the definition of "2007 value" in section 24, the actual value of a property is, subject to this section, the actual value of the property as determined under the Assessment Act.
(2) Section 18 of the Assessment Act does not apply for the purposes of this section.
(3) For the purpose of determining the actual value of the property, the valuation date is July 1, 2007.
(4) The actual value of the property is to be determined as if on the valuation date
(a) the property and all other properties were in the physical condition that they are in on October 31, 2008, and
(b) the permitted use of the property and of all other properties were the same as on October 31, 2008.
(5) Subsection (4) (a) does not apply to property referred to in section 10 (3) (b), (c) or (c.1) of the Assessment Act.
(6) The actual value of a property referred to in section 10 (3) (b), (c) or (c.1) of the Assessment Act is to be determined as if on the valuation date the property was in the physical condition that it is in on December 31, 2008.
(7) In applying section 19 of the Assessment Act for the purposes of this section, the reference to "on October 31 following the valuation date under section 18" in section 19 (10) of that Act is to be read as "on October 31, 2008".