Author: Financial Awakening Blog
If you still haven’t read Fighting with MPAC – Case Study 1, I highly recommend you to read it first.
- Case Study
We’ve talked about similar lands in the vicinity and ASR from the previous case. We will study a new case this time. This case is about an actual sale that took place just 3 months before the valuation date.
Case WR49892
In this case, the owner purchased a cottage just 3 months before the valuation date of January 1, 2005. He believed that this is the best representation of the current value. On the other hand, MPAC argue that he had a bargain and would like to use the similar properties in the vicinity approach to determine the current value.
The owner then argued that there are differences in the comparables, and it would not be right to use those comparables.
ARB made a decision to lower the assessed value to that of the purchased price because MPAC do not have enough evidence to prove that the owner had a bargain deal.
In this case, we’ve learned that the actual sale price is still the best representation of the current value and it is hard for MPAC to prove that you got a bargain deal.
Also, take a look at 44(3) that we talked about last time.
From Assessment Act
44(3) For 2009 and subsequent taxation years, in determining the value at which any land shall be assessed, the Board shall,
(a) determine the current value of the land; and
(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. 2008, c. 7, Sched. A, s. 13.
According to this rule, MPAC cannot use the similar properties method to increase your assessment. If you run into this situation, it is a good idea to also mention this point.
Please take 5 minutes to read the case. It is not long, but can give you insight of the whole idea.
You can download the case here. -> MPAC Case 2 WR49892
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