A decades-long dispute between Halifax and the federal government over the value of the Halifax Citadel National Historic Site of Canada (Citadel) came to a head on January 15, 2015, when the Payment in Lieu of Taxes Dispute Advisory Panel (DAP) issued its advice on the Market Value of the Citadel.
Overlooking the city’s downtown core, the Citadel comprises 48 acres of land including an historic fortress.
The issue before the DAP was the Market Value of the Citadel for the 2013 assessment year. The parties agreed on the value of the improvements to the property, however argued the value of the underlying land. The 2013 published assessment of the land was $25,763,700.
At the hearing, Halifax submitted two reports based on a land value estimate derived from sales of land in the vicinity of the Citadel, conducted by the following parties:
1) Local assessor who valued the land at $51,000,000, and;
2) Private Property Tax Consultant Mark Turner of Turner Drake & Partners Ltd. who put the value at $68,214,000.
Public Works and Government Services Canada (PWGSC) commissioned an appraisal report by a local appraiser, in which the value of the site was based on a hypothetical subdivision on a portion of the property, as well as a value for land beneath the footprints of the existing improvements. The appraiser valued it at $12,160,000. PWGSC then submitted a separate document stating the value in the appraiser’s report should be further reduced by 70% to reflect use restrictions tied to the National Historic Site designation. The final value submitted by PWGSC was $3,648,000.
The panel made a number of findings in preparing its advice on the Market Value of the Citadel:
- The role of the Minster is not merely to review the value attributed by the local assessing authority; however, that value does serve as an important reference point.
- A Market Value estimate should be based on the current/existing use of the property without regard to potential or hypothetical alternate uses.
- The slope and restrictive zoning compliment the intended “public purpose” for the property; thus, are not suitable grounds for a reduction in value.
- Properly selected and adjusted sales comparables form an appropriate basis for determining a Market Value.
- The restrictions placed on the property by virtue of its status as a National Historic Site area not an appropriate basis for a reduction in value.
The result: the panel determined the Market Value that would be attributed by an assessment authority for the 2013 assessment year to be $41,222,000.
If you have any questions regarding the Halifax Citadel property tax dispute, you can reach Mark Turner at (902) 429-1811 or .