Docket LT96004
Order LT96-05

IN THE MATTER of an appeal by Gerard Mulder against a decision of the Provincial Treasurer with respect to the 1995 assessment of Provincial Property Number 89946 located at Seaview, P.E.I.

BEFORE THE COMMISSION

on Thursday, the 12th day of December, 1996.

John Blakney, Vice-Chair
Carl Riggs, Commissioner
James Nicholson, Commissioner

Order

Contents

Submissions

Reasons for Order

1. Introduction

2. Discussion

3. Findings

4. Disposition

Order

Submissions

This appeal was conducted by way of written submissions pursuant to the provisions of Section 29.(3) of the Real Property Assessment Act.

Written submissions were presented by:

1. For The Appellant

Gerard Mulder

2. For The Provincial Treasurer

Kevin Dingwell

Reasons for Order

1. Introduction

This is an appeal under Section 22.(1) of the Real Property Assessment Act, R.S.P.E.I. 1988, Cap. R-4, by Gerard Mulder (the Appellant) against a decision of the Provincial Treasurer with respect to the 1995 assessment of Provincial Property Number 89946 located in Seaview.

The subject property is an unimproved 20 acre parcel of land located on the north shore of the province and fronting on the Gulf of St. Lawrence. The property has approximately 1,260 feet of shore frontage and is accessed via a right-of-way from Route 20.

By Notice of Appeal dated February 6, 1996 the Appellant appealed the 1995 assessment to the Island Regulatory and Appeals Commission (the Commission). The assessment value under appeal is $71,100.

With the written consent of both the Appellant and the Provincial Treasurer, the Commission heard the appeal by way of written submissions, pursuant to Section 29.(3) of the Act.

2. Discussion

A. The Appellant

The Appellant's position may be summarized as follows:

From the Notice of Appeal, the Appellant provides the following reasons for appealing the 1995 assessment:

The property is not more worth for agricultural use than $1,000 per acre. This property is on the cape and the salt spray prefend[sic] to grow any good crops.

The information we received indicated that hardly any property is selling. The assessment that is put on is ridiculous. This shows, the person involved doesn't know much about property values at all. Also advantage is taken from the fact that we live so far away. We even came to P.E.I. in an extra trip to solve the matter. The only offer we ever got was $19,000.00 for the whole 20 acres. If you think it is worth more, than buy it and pocket the difference.

In a letter to the Commission dated March 25, 1996, the Appellant submits that the land is "far from prime farm land" and based on his experience in farming the property for twelve years, "not much grows on the land in question because of the wind and the continuous salt spray".

The Appellant submitted a letter, dated June 12, 1995 from Newdale Ventures Ltd. who made an offer to purchase the property for $19,000. The Appellant states that this was the only offer they received for the property.

In addition, in a letter to the Commission dated July 3, 1996 the Appellant questioned how the Provincial Treasurer is able to assess the land value by adding another $35 per foot for shore frontage while the land is already assessed at $1,350 per acre.

B. The Provincial Treasurer

The position of the Provincial Treasurer may be summarized as follows:

The Provincial Treasurer states at page 4 of the submission under gray bound cover, that due to the present restrictions placed on development of shore-front property for cottage subdivision purposes, the subject property is valued at its present use of Class three (3) arable land with an added value due to shore frontage. The Provincial Treasurer submits this method of valuation is consistent with comparable properties in this area.

The Provincial Treasurer submits that the assessment under appeal was arrived at on the basis of an appraisal which was completed on October 4, 1994, with an effective date of January 1, 1995.

The property is valued as twenty acres of Class 3 arable land at $1,350 per acre plus 1260 feet of ocean frontage at $35 per front foot. These values are consistent with comparable properties (document under gray cover at page 7) within the work unit for the 1995 assessment year.

The Provincial Treasurer contends the subject property is not over assessed and the assessment is uniform with other comparable properties in the area.

3. Findings

After giving full consideration to all written submissions by both parties, the Provincial Treasurer's Land Valuation Guide for 1995, the Policy and Procedures Manual and the Assessment Manual used by the Provincial Treasurer the Commission has decided to deny the appeal. The reasons for this decision are as follows:

On the issue of the quality of the land and the property's limitations for farming, the Appellant submits that the property's location on the cape and the effects of the wind and salt spray, "prevents growing any good crops".1 The Appellant argues that the property is not worth more that $1,000 per acre.

On this matter, the Provincial Treasurer has graded the property as having Class 3 soils and according to the Assessment Manual, Class 3 soils have moderately severe limitations that restrict the range of crops, and constantly require special conservation practices.2 The soils in this class are mostly suited to growing forage crops. According to the Land Valuation Guide, cleared land comprised of Class 3 soils located in this work unit (number 2097 - Seaview) are valued at $1,350 per acre.3

From the 1995 Referral Disposition of Assessment (contained in the Provincial Treasurer's submission) which was made at the request of the Appellant, the Commission understands that the 1995 assessment was varied from $80,100 to $71,100 due to a reclassification of the arable land from Class 2 to Class 3.

The Commission has reviewed the Provincial Treasurer's assessment calculations and finds that the Minister has applied a standardized value of $1350, which is consistent with the Land Valuation Guide and is applied to other properties in the work unit comprised of cleared land and Class 3 soil. The Appellant has not provided sufficient evidence to support the argument that the property should be classed lower than Class 3 soil or the application of the standardized value would be invalid in this case. The Commission believes that although the Appellant may not agree with this value, this is a decision that in general - unless shown to be extremely in error - should be left to the Provincial Treasurer.

With respect to the Appellant's concern for the Provincial Treasurer's ability to apply a per acre value in addition to a shore frontage value, the Commission understands that according to the Policy and Procedures Manual at Section S, Instruction No. 60, pertaining to Shore Front Valuation4:

When a property borders the shore line there may be added value attributable to that shore line in relation to a non shore front property.

This policy is based on the relationship of the value of the shore frontage to the value of the shore front lots in the area. The more desirable the frontage, the more the shore front lots will command.

Under subsection (D) pertaining to backup land:

All backup land will be valued in considering established workunit classification rates for the area. Where two adjacent or comparable pieces of land are being assessed, (one with shore frontage and one without), the only difference in value will be that attributable to the frontage.

Although the Appellant contends that hardly any property is selling, the Provincial Treasurer has determined that the shore frontage of the property under consideration is desirable as there is a growing demand for recreational property which has created an added value for all shore front property in this area. The Provincial Treasurer submits that this demand is illustrated by the number of sub-division cottage lots that appear on the comparable assessment map.

In calculating the assessed value of the subject property, the Provincial Treasurer has applied a per acre value of $1,350 to the 20 acre parcel for a value of $27,000 and a shore frontage value of $35 per foot to the 1,260 of shore frontage for a value of $44,100. The total assessed value of the property is $71,100.

In support of this methodology, the Provincial Treasurer has submitted an analysis of seven properties in the work unit, demonstrating that the assessment per acre of $1,350 for Class 3 cleared land, is applied to all similar properties within the work unit. In addition, the analysis supports that the value of $35 per front foot is applied uniformly to all properties in the work unit which have comparable shore frontage.

In reviewing the calculations, methodology, Real Property Assessment Manual , Policies and Procedures Manual, and Land Valuation Guide relied upon by the Provincial Treasurer, the Commission finds the approach used in applying a per acre value and a front foot value is valid and appropriate to determine market value for the subject property.

The Appellant has not provided sufficient evidence to support that the values applied by the Provincial Treasurer are wrong or that the approach to derive the assessed value of the subject property is incorrect.

Overall the Commission finds that the assessment is not too high and that the Provincial Treasurer has demonstrated the uniformity of this assessment in relation to other assessments.

4. Disposition

For the reasons given the appeal is denied and the Commission affirms the 1995 assessment of $71,100.

IN THE MATTER of an appeal by Gerard Mulder against a decision of the Provincial Treasurer with respect to the 1995 assessment of Provincial Property Number 89946 located at Seaview, P.E.I.

Order

WHEREAS the Appellant, Gerard Mulder has appealed the 1995 assessment of Provincial Property Number 89946, located at Seaview, P.E.I.;

AND WHEREAS the Commission heard the appeal by way of written submissions;

AND WHEREAS the Commission has issued its findings in this matter in accordance with the Reasons for Order issued with this Order;

NOW THEREFORE, pursuant to the Island Regulatory and Appeals Commission Act and the Real Property Assessment Act,

IT IS ORDERED THAT

1. The appeal is hereby denied.

DATED at Charlottetown, Prince Edward Island, this 12th day of December, 1996.

BY THE COMMISSION:

John L. Blakney, Vice-Chair

Carl Riggs, Commissioner

James Nicholson, Commissioner

NOTICE

Section 12 of the Island Regulatory and Appeals Commission Act reads as follows:

12. The Commission may, in its absolute discretion, review, rescind or vary any order or decision made by it or rehear any application before deciding it.

Parties to this proceeding seeking a review of the Commission's decision or order in this matter may do so by filing with the Commission, at the earliest date, a written Request for Review, which clearly states the reasons for the review and the nature of the relief sought.

Sections 33 and 34 of the Real Property Assessment Act provide as follows:

33. Notwithstanding anything in any public or provate Act, an appeal lies to the Supreme Court of the province from any order, decision, or award of the Commission, if notice of the appeal is given the other parties within forty-five days after the making of the order, or decisions sought to be appealed from.

34. The rules and practices of the Supreme Court respecting appeals apply with the necessary changes to any appeal.

1 February 7, 1996, Notice of Appeal.

2 Provincial Treasury, Real Property Records Division, Assessment Manual, p. 16.

3 Provincial Treasury, Land Valuation Guide for the Assessment Year 1995, p. 19.

4 Provincial Treasury, Policy and Procedures Manual, Section S, Instruction No. 60.