An analysis of a recent CBC News article: Tim Hortons founder spent up to $10M a year subsidizing his luxury Nova Scotia resort
A prominent entrepreneur purchased an extensive property close to where he grew up and fulfilled a personal dream by building a conspicuous vanity project to memorialize one of Canada’s most storied business empires. Upon completion, the local tax authorities issued a tax bill to the heirs of that property based on an assessment far exceeding what the owners deemed to be fair and reasonable.
Such is the case with the Estate of Ron Joyce, co-founder of the Tim Hortons empire who in 2000 built Fox Harb’r, a 401-hectare gated resort on the Northumberland Strait, near his hometown of Tatamagouche.
The property features a championship golf course, marina, game preserve, private jet runway, stables, and a vineyard. It is safe to say that in the province of Nova Scotia there is no other property quite like it.
But the very uniqueness of Fox Harb’r has led to a contentious squabble with the province about its value. The CBC News website highlighted this issue in late 2022.
In 2020, the Property Valuation Services Corporation (PVSC), the body responsible for setting property values in Nova Scotia, issued a tax bill based on a property valuation of $21 million. The figure is almost four times the $5.7 million valuation the Fox Harb’r development team estimated.
The disparity has arisen due to disagreement on several factors including the price of comparable properties and the income generated by the property.
Prior to his passing in 2019, Joyce routinely underwrote operating losses, peaking at $8-$10 million annually. In PVSC’s view, the assessment provided by Fox Harb’r was improperly weighted to an income approach and did not fully consider the direct comparison method.
(Here you can find an earlier post where we wrote about the income method of valuation).
This case underscores the importance of logically deriving an assessment value and considering many variables when paying property tax. Without the right information, property owners and managers can unexpectedly find themselves on the hook for insurmountable sums of money. Such financial burdens may be premised on faulty valuation logic. And, without the right tools, making your case could be difficult.
Itamlink is one of the industry’s most trusted and effective tools in assembling and managing the components that make up a property’s value methodically and from all angles.
This is a cautionary tale, as well as a textbook example of the type of dispute that routinely transpires when property owners and local governments reach an impasse and are unable to agree on a property’s underlying value.
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