Saskatchewan Municipal Board Assessment Appeals Committee RESPONDENT: Rural Municipality of McKillop No. 220 Appeal: 2007-0149 In the matter of an appeal to the Assessment Appeals Committee, Saskatchewan Municipal Board, by: Bob and Gail Schmidt Box 343 Silton, Saskatchewan S0G 4L0 respecting the assessment of: for the year 2007; SE 16-23-23 W2nd Alternate Number: 220-00616300 BEFORE: APPEARED FOR THE APPELLANT: APPEARED FOR THE RESPONDENT: APPEARED FOR THE SASKATCHEWAN ASSESSMENT MANAGEMENT AGENCY: David Wilkin, Chairman Wade Armstrong, Member Bruno Kossmann, Member Sandra Sylvester, Acting Secretary Bob Schmidt, Gail Schmidt No one appeared Chris Leader This appeal was heard in Room 460, 2151 Scarth Street, in Regina, Saskatchewan, on April 10, 2008.
APPEAL 2007-0149 [Page 2] This appeal is against the decision of the Board of Revision (the Board) for the Rural Municipality of McKillop No. 220, pursuant to section 246 of The Municipalities Act (the Act). ISSUES: (i) (ii) Did the Board err in its decision when it found that the addition to the boathouse is assessable? Did the Board err in its decision when it found that the shop is used as a garage and be assessed as such? FACTS: (1) The property is located in the SE 16-23-23 W2nd in the Rural Municipality of McKillop No. 220. (2) The property is a sixty acre parcel improved with the following buildings: a) Summer cottage, 1,358 square feet (10% unfinished); b) Closed verandah, 200 square feet; c) Patio, 350 square feet; d) Former attached garage on cottage converted to living area, 616 square feet (30% unfinished) - this makes the total cottage square footage 1,974 square feet; e) Basement under former attached garage converted to living area, 616 square feet; f) Detached garage, 1,200 square feet; g) Detached garage (boathouse), 336 square feet; h) Closed verandah/porch, 81 square feet, on the side of the boathouse; i) Deck, 162 square feet, on the side of the boathouse; and k) Steel frame storage building (Code 401), 1,600 square feet. The improvements are mostly rated in average condition. The land is rated as 60 acres with residential site and approximately 52 acres cultivated. (3) The appealed fair value of the property was as follows: Land - $13,500 agricultural and $800 residential Improvements - $104,400 residential Improvements - $ 8,400 agricultural The agricultural components are assessed at 55% of fair value and the residential components are assessed at 70% of fair value.
APPEAL 2007-0149 [Page 3] There is an exemption recommended of $51,865 for the residential improvements and $4,620 for the agricultural improvements, subject to section 293(2)(e) of the Act. At the time of appeal the market adjustment factor was 0.79. (4) The grounds of appeal to the Board were: Exemption for farm building not proper. Machine shed and shop not exempted. We farm over 500 acres and still no exemption on farm buildings. This is (sic) has been a problem for 2 years. The assessment of other building is not proper. There is no porch on boat house. Assessment is not fair compared to other properties in RM and other RMs. Also assessment notice does not reflect that we own the farm land we have title to. (5) The decision of the Board found the following: The board finds that the addition to the boathouse is assessable and should remain the same. The board feels that the shop is being used as a garage and therefore should be assessed and remain the same. The board feels that the 401 machine shed houses only farm equipment and therefore a full exemption should be given. This would reduce the residential building assessment by 8,440. Also the exemption for other farmland now owned should be included as shown in SAMA s recommended assessment. (6) The record of the Board includes: a) Notice of appeal dated June 14, 2007; b) Board letter dated June 18, 2007 notifying hearing date and time; c) An assessment report from the Saskatchewan Assessment Management Agency (SAMA) consisting of seven pages signed by Chris Leader, Appendices C to F and revised field sheets pages 1 to 5; d) Minutes of the Board dated July 25, 2007; and e) Board letter dated August 1, 2007 with attached Board decision dated July 25, 2007. (7) The grounds of appeal to the Committee are: 1. Some of the members of the Board of Revision for the RM of McKillop No. 220 appeared as if they did not understand some items in our arguments presented at the hearing. Specifically they appeared not to understand the term MAF (market adjustment factor) and farm building exemption (improvement exemption under section 293(2) of the Municipalities Act). We feel this hampered their decision-making ability.
APPEAL 2007-0149 [Page 4] 2. Two of the members were not residents of the RM. They were residents of the town of Strasbourg. There has always been a perceived animosity between town residents and farm residents over differences in assessments and property taxes. Also, one of the board members should have excused themselves from the hearing due to a possible conflict in a land transaction next to our property. We feel the impartiality of the board may have been compromised. 3. The 9 x 9 lean-to structure built against the boathouse is not an addition to the boathouse in that it does not add any space to the boathouse and does not have a doorway into the boathouse. It is a shed lean-to structure beside the boathouse and by the definition present (sic) by the SAMA rep it does not fit the definition of a closed veranda or porch. By definition in the Saskatchewan Assessment Manual, it is a lean-to and since it is less than 100 sf in size, it is not assessable. The board used the term sunroom in their respondent facts section. This term was never used or presented by the SAMA rep. By this term mysteriously appearing in the notice of decision leads us to believe that the board possibly errored (sic) through a misunderstanding. 4. The 30 x 40 building we use as a shop is a structure built to farm building specs. It was framed 2 foot on centre, has farm-building trusses and is sided with low cost metal. There is no wood sheathing at all. It has no overhangs, eaves or fascias. I have never seen anything similar that is used as a residential garage. Over $50,000 of tools and equipment is stored in the building for repair and maintenance of our farm equipment. We have mainly old farm equipment that requires continuous repairs. We also store the chemicals for farm operation in this building. The SAMA rep did mistaking (sic) miss classified the building as a garage and miss lead the board by stating that quite a lot of the equipment is not stored inside the building. This is a shop, not a storage building, yet we could park our farmregistered vehicles in the building if we wish. We did offer to take only a 50% exemption if the building was properly classified at the MAF of 58%. That would be that we would agree to a half personal use until our new garage is built. To read the board s decision that they feel the shop is being used as a garage and therefore assessed as one only reinforces our claim under item 1 and 2 above. 5. There was not one word of a response from the board concerning our other very serious claims including that the RM was not adhering to the requirements set out in the Municipalities Act. This is probably expected considering the fact that the RM council appoints the board. Our dealings with this current council have been very tenuous. Last year due to an addressing mistake, we never received a notice of assessment that
APPEAL 2007-0149 [Page 5] LEGISLATION: The Municipalities Act: removed our exemptions. After repeated attempts to request an abatement including appearing before council where we were ridiculed by a council member and even though they did give other RM residents abatements for the same reasons, we were denied and the denial letter was sent six months late again to the wrong address. The extra tax we had to pay last year for the fiasco is a loss and now we can only look forward to resolving the problems with the current assessments. 6. Finally we did not receive any answers to our question of fair treatment for all residents of this RM and this province in regards to assessments and property taxation. There are many instances in this RM and throughout the province where buildings and other improvements are not assessed even thought (sic) the Municipalities Act dictates that ALL must be assessed. I can understand this for large farm operations where the amount of work to assess all buildings will end up showing no net tax gain. What we are concerned about is the non-farm operations that have no improvement assessments because they are rural and hidden from the public eye. I have reported many instances of this to the RM, other government departments and to SAMA. It seems that no one really cares. If they bring the magnifying glass out and assess every building on our farm because we are located beside a residential area, then to be fair to all ratepayers, all building and improvements have to be assessed, including non-farm acreages and rural residential sites. The current system of SAMA working on only RM supplied maintenance lists is not enough. It would be surprising to find out just how many improvements are not assessed in this RM and throughout the province. 195(1) The assessor shall prepare assessments for all property in the municipality. (2) All land is to be assessed at its fair value as of the applicable base date separate from any improvements on the land. (3) Notwithstanding subsection (2), land and improvements may be assessed separately in circumstances where separate values are required. (4) Each assessment must reflect the facts, conditions and circumstances affecting the property as at January 1 of each year as if those facts, conditions and circumstances existed on the applicable base date. (5) The dominant and controlling factor in the assessment of property is equity.
APPEAL 2007-0149 [Page 6] (6) The value at which any property is assessed is to bear a fair and just proportion to the value at which all similar property is assessed: (a) in the municipality; and (b) in any school division situated wholly or partly in the municipality or in which the municipality is wholly or partly situated. (7) In determining the value of any property, the assessor shall take into consideration and be guided by: (a) any applicable formula, rule or principle set out in the assessment manual; and (b) any facts, conditions and circumstances of the property that may affect its value. (8) For the purposes of subsection (7), the assessment shall reflect all the facts, conditions and circumstances of the property on January 1 of each year as if they had existed on the applicable base date. 240(1) After hearing an appeal, a board of revision or, if the appeal is heard by a panel, the panel may, as the circumstances require and as the board or panel considers just and expedient: (a) confirm the assessment; or (b) change the assessment and direct a revision of the assessment roll accordingly: (i) subject to subsection (3), by increasing or decreasing the assessment of the subject property; (ii) by changing the liability to taxation or the classification of the subject property; or (iii) by changing both the assessed value of the subject property and its liability to taxation or its classification. (2) A board of revision or panel shall not exercise a power pursuant to subsection (1) except as the result of an appeal. (3) Notwithstanding that the value at which any property has been assessed appears to be more or less than its fair value, the amount of the assessment may not be varied on appeal if the value at which it is assessed bears a fair and just proportion to the value at which all similar property is assessed: (a) in the municipality; and (b) in any school division situated wholly or partly in the municipality or in which the municipality is wholly or partly situated.
APPEAL 2007-0149 [Page 7] (4) A board of revision shall decide all appeals within 90 days after the date on which the municipality publishes a notice pursuant to section 217, and no appeal may be heard after that date unless allowed pursuant to subsection 219(2) or 243(9) or section 404. (5) After a decision is made pursuant to subsection (1), the secretary of the board of revision shall, by registered mail, send to each party: (a) a copy of the decision together with written reasons for the decision; and (b) a statement informing the party of the rights of appeal available pursuant to section 246 and the procedure to be followed on appeal. 246 Subject to section 224(5), any party to an appeal before a board of revision has a right of appeal to the appeal board: (a) respecting a decision of a board of revision; and (b) against the omission, neglect or refusal of that board to hear or decide an appeal. 293(1) In this section: (a) agricultural operation : (i) includes the tillage of land, the production or raising of crops, dairy farming, the raising of poultry or livestock, the production of poultry products or livestock products in an un manufactured state and any portion of the use of an operation mentioned in subclause (ii) that is determined by the Saskatchewan Assessment Management Agency to be a noncommercial use; but (ii) does not include the commercial operation of seed cleaning plants, farm chemical and fertilizer outlets, grain elevators, equipment sales and service enterprises and other similar commercial operations; (b) land means land: (i) for which the predominant potential use is cultivation, determined by the assessor as the best use that could be reasonably made of the majority of the surface area; (ii) for which the predominant potential use is as range land or pasture land, determined by the assessor as the best use that could reasonably be made of the majority of the surface area; (iii) the majority of the surface area of which is not developed for any use, has been left in or is being returned permanently to its native state or cannot be used for agricultural purposes; or (iv) used for any other agricultural purpose.
APPEAL 2007-0149 [Page 8] (2) In addition to the exemptions provided for by section 292, the following are exempt from taxation in rural municipalities: (a) unoccupied buildings that are residential in nature and that are situated on land; (b) buildings that are used to grow plants in an artificial environment; (c) improvements, other than dwellings, that are used exclusively in connection with the agricultural operation that is owned or operated by the owner or lessee of the improvements; (d) the portions of improvements, other than dwellings, that are: (i) used partly in connection with the agricultural operation that is owned or operated by the owner or lessee of the improvements and partly for other purposes; and (ii) determined by the Saskatchewan Assessment Management Agency to be attributable to that agricultural operation; (e) a dwelling that is situated outside of an organized hamlet and occupied by an owner or a lessee of land, to the extent of the amount of the assessment of the dwelling that does not exceed the total of the assessments of any land in the rural municipality or in any adjoining municipality that is owned or leased by: (i) the occupant, the occupant s spouse or both of them; (ii) subject to subsection (3), a partnership of which the occupant is a partner; or (iii) subject to subsection (3), a corporation of which the occupant is a shareholder. (3) For the purposes of clause (2)(e): (a) the assessment of land owned or leased by: (i) a partnership of which any person who is an occupant is a partner is deemed to be that portion of the actual assessment of the land that bears the same relationship to that actual assessment as the number of persons who are the occupants and who are partners in the partnership bears to the highest number of partners in the partnership at any time in the taxation year; or (ii) a corporation of which any person who is an occupant is a shareholder is deemed to be that portion of the actual assessment of the land that bears the same relationship to that actual assessment as the number of shares of the corporation held by persons who are the occupants bears to the highest
APPEAL 2007-0149 [Page 9] number of issued shares of the corporation in the taxation year; and (b) if more than one dwelling described in clause (2)(e) is owned or leased by any of the persons mentioned in subclauses (2)(e)(i) to (iii), clause (2)(e) applies: (i) if the dwellings are in the same rural municipality, only to the residence with the greater assessment; and (ii) if the dwellings are in adjoining municipalities, with respect to each dwelling, only to the amount of the assessment that does not exceed the total of the assessments of any land in the rural municipality in which the dwelling is located that is owned or leased by one or more of those persons. (4) A lessee is only eligible to receive the exemption provided for by clause (2)(e): (a) with respect to land leased from an owner who is not eligible to receive the exemption; and (b) with respect to land leased from an owner who is entitled to the exemption, if the owner or lessee provides to the assessor, on or before March 31 in any year, a copy of the lease and a written notice signed by the owner stating that the owner has agreed that the lessee is to receive the exemption. (5) If a written notice has been provided to the assessor pursuant to clause (4)(b), the lessee continues to receive the exemption until the owner or lessee provides to the assessor a written notice, signed by the owner, rescinding or amending the previous notice on or before March 31 in the year in which the rescission or amendment is to be effective. (6) If the lease provided to the assessor pursuant to clause (4)(b) is amended, the lessee shall promptly provide the assessor with a copy of the lease as amended. CONCLUSIONS AND REASONS: [1] This Committee has received an appeal against a decision of the Rural Municipality of McKillop No. 220 Board of Revision, and on the basis of the presentations of the appellant and respondent, must decide if the record shows that an error has occurred. The role of the Committee is not to redo the hearing. Rather, the Committee is to review the evidence from that hearing and determine whether the Board came to the proper conclusion in rendering its decision. Should the Committee conclude that the Board did not come to the proper conclusion based upon the evidence before it, the Committee is then required to
APPEAL 2007-0149 [Page 10] do what the Board ought to have done. The onus is upon the appellant to demonstrate to the Committee where the Board has erred. [2] It should be noted that the Committee has no jurisdiction to deal with the appellant s grounds 1, 2, 5 and 6 and accordingly, will not comment any further. [3] The appellant stated in his written submission as well as at the hearing regarding ground 3, that the 9 foot by 9 foot lean-to structure built against the boathouse is not an addition to the boathouse since it does not add any space to the boathouse and does not have a door way into the boathouse. He further stated that the structure does not fit the definition of a closed veranda or porch. By definition in the Saskatchewan Assessment Manual, it is a lean-to and since it is less than 100 square feet in size, it is not assessable. [4] In regards to ground 4, the appellant stated that the 30 foot by 40 foot building is a shop and is a structure built to farm building specifications. It is framed 2 foot on centre, has farm-building trusses and is sided with low cost material. It has no wood sheathing at all and has no overhangs, eaves or fascias. Over $50,000 of tools and equipment is stored in the building for repair and maintenance of their farm equipment. Also, the chemicals for their farm operation are stored in this building. [5] In regards to the appellant s ground 3 the respondent (SAMA) stated that the lean-to does not meet the definition of veranda but concedes that due to the size it should not be assessable. [6] In regards to ground 4, the respondent stated that the 30 foot by 40 foot building (Shop) does have overhead doors and would have to have a different use than the rest of the property. At the time of inspection, this building did not have much agricultural equipment in it. He could not remember exactly what was in the
APPEAL 2007-0149 [Page 11] shop other then welding and shop material along one wall. He considered this building as a garage and therefore residential use. [7] The Committee determined based on the information provided by the appellant and respondent that the Board erred in its decision to classify the lean-to assessable. The structure, due to its size (less than 100 square feet), is not assessable. [8] The Committee also determined that the Board erred when it found the 30 foot by 40 foot shop is a garage and is taxable. Based on the information provided by the appellant, the shop is used for agricultural purposes and therefore exempt from taxation. DECISION: This appeal is sustained. For 2007, the lean-to shall be removed from the assessment record and the shop shall be exempted from taxation as an agricultural building. The filing fee shall be refunded.
APPEAL 2007-0149 [Page 12] DATED AT REGINA, Saskatchewan this 11 th day of July, 2008. SASKATCHEWAN MUNICIPAL BOARD Assessment Appeals Committee Per: David Wilkin, Chairman Per: Cynthia J. Schwindt, Secretary Bruno Kossmann, for the Committee I concur: Wade Armstrong, Member