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FINANCE - Taxation - Real or immovable property assessment

Tuesday, September 24, 2019 @ 8:42 AM  


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Appeal by 994552 N.W.T. Ltd. from a decision of the Assessment Appeals Committee of the Saskatchewan Municipal Board pertaining to the 2016 municipal property tax assessments of two full-service hotels. The property assessments applied direct capitalization to convert the expected level of potential income of hotel properties into a market value-based assessment. The capitalization rate was determined from the sale of similar properties. The assessor used a capitalization rate of 10.9 per cent to value full-service hotels, as required by two previous decisions of the Committee, but applied a different capitalization rate to limited-service hotels. The Committee concluded it did not authority or jurisdiction to address the disparity in capitalization rates between full-service and limited-service hotel properties because the appellant failed to establish any error in the assessment of its full-service hotel properties.

HELD: Appeal allowed. The Committee erred when it concluded it had no authority or jurisdiction to address the disparity in capitalization rates between full-service and limited-service hotel properties. The assessor was bound by s. 195(4.1) of the Municipalities Act to apply the Committee’s previous decisions that set the capitalization rate to be used to value both full-service and limited-service hotels. The assessor’s application of different capitalization rates constituted an error and rendered the assessment of full-service hotels inequitable. The property assessments did not meet the market valuation standard and equity with respect to those properties was not achieved. The Committee had the power pursuant to s. 256 of the Act to correct the inequity and had the power to direct the tax assessment agency to comply with its orders. The tax assessment agency was ordered to comply with the Committee’s previous decisions on a prospective basis.

994552 N.W.T. Ltd. v. Kindersley (Town), [2019] S.J. No. 288, Saskatchewan Court of Appeal, P.A. Whitmore, J.A. Ryan-Froslie and B. Barrington-Foote JJ.A., August 8, 2019. Digest No. TLD-September232019004