Thunder Bay area property owner appeals how MPAC valuates land; land valuation drops $144K
A property owner in Murillo has had his assessment drop by more than 25 per cent, after an appeal to the Municipal Property Assessment Corporation (MPAC).
The owner, who has a piece of land in Murillo, Ont., just outside of Thunder Bay, appealed his 2016 assessment by MPAC. The matter was heard in January 2020, with a written decision issued a few months later.
At the hearing, the landowner said the valuation of $531,000 for their piece of rural land, which included a small sawmill and 4 buildings was too high.
MPAC said for forestry companies, it used what is called the cost approach to value land, less 25 per cent. It reduced the valuation of the property to $434,000.
The owner argued this method was not accurate for Thunder Bay and surrounding area - noting he felt his land was worth closer to $325,000. He said the cost approach did not reflect the depressed market in the area, and that reducing the value by 25 per cent for economic obsolesce did not lead to a fair value.
At the hearing, the owner made a comparison to a piece of property, much larger than that being appealed, with similar buildings, which was listed for sale for seven years at a price of $599,000.
The owner said the lack of sale showed his property could not be valued at the original $531,000 assessment, as the higher priced land, which was superior to his, had never sold.
The owner said a piece of land on Highway 527, similar to his, had sold for $300,000, showing what the market would bear.
The Assessment Review Board agreed with the property owner, reducing the valuation of the land to $387,000, and noting that the cost approach was not appropriate in determining the valuation of land in the area.