South Country Holdings Ltd. won an order restoring warehouse treatment for its property in the Rural Municipality of Weyburn after Saskatchewan’s Assessment Appeals Committee found the assessor had not justified switching it to a retail category for 2025.
In its September 9 decision, South Country Holdings Ltd. v Weyburn (Rural Municipality), 2026 SKMB 82, the committee directed that the property be classified as Warehouse under the Saskatchewan Assessment Management Agency’s model and assessed using the corresponding 12.21 per cent capitalization rate, rather than the 7.15 per cent retail rate.
The company did not succeed on everything. The committee rejected its request for a large-warehouse obsolescence adjustment because that factor belonged to a different valuation method. The order did not set a final revised dollar assessment or award a tax refund.
Why the classification mattered
SAMA had valued the property using the income approach in both the previous assessment cycle and the new one. That approach estimates value by dividing market net operating income by a capitalization rate. In that formula, holding income constant, a higher capitalization rate produces a lower assessed value. A capitalization rate is a valuation input, not a municipal tax rate.
For 2024, the property’s warehouse classification and a 12.43 per cent capitalization rate produced an assessed value of $3,121,900. For 2025, the retail classification and 7.15 per cent rate produced an initial assessment of $5,528,300. Those are assessed property values, not tax bills. The committee ordered use of the 2025 warehouse rate of 12.21 per cent; it did not simply reinstate the previous year’s rate or value.
The local Board of Revision had dismissed the company’s appeal on all grounds. Represented by MNP LLP, South Country challenged the retail classification, the refusal of a size adjustment, the adequacy of the board’s reasons and its treatment of assessment equity.
Market argument did not justify this switch
The municipality, represented by SAMA, argued that machinery dealerships were more comparable to retail properties than general storage warehouses. Showroom and parts-inventory areas distinguished them from ordinary warehouses, it said, and such properties did not sell in the same market. It also defended the assessor’s discretion and argued that the board had given coherent reasons grounded in assessment law.
The municipality disputed criticism of its underlying market information, pointing to 690 rents, 22 sales and acceptable statistical testing for the income models. The committee did not decide the case on the number of comparable sales or rents. It also agreed with the municipality that the choice of a Marshall & Swift costing code was generally irrelevant to the income-approach classification dispute.
Instead, the committee focused on the findings already made about the property and the explanation for changing its treatment. The board had accepted that retail occupied approximately 15 per cent of the leasable area. The remainder was generally parts storage and a farm-machinery service garage, with a small office area. Those findings pointed toward warehouse-like use and configuration.
The property had previously been assessed as a warehouse. There had been no material change in its physical characteristics, use, function or ownership. When the committee asked SAMA whether changed circumstances supported the shift, none were identified. Nor was there evidence of a market shift supporting the new classification and accompanying change in capitalization rate.
The committee found that the assessor’s explanation appeared directed at aligning treatment with other communities. That did not establish an equitable assessed value for this property. On the evidence in this appeal, it found the retail classification and 7.15 per cent rate had produced an inequitable assessment.
Equity concerned the result, not just the method
The committee also found shortcomings in the board’s reasons. Although the board explained some reasons for accepting the assessor’s work, it did not adequately explain why it rejected MNP’s evidence and arguments. Its classification conclusion conflicted with its own factual findings, and references to assessor discretion did not resolve that conflict.
For non-regulated property such as this, the committee emphasized the distinction between applying a methodology consistently and achieving an equitable assessed value. Using the same process for similar businesses across different communities did not, by itself, answer whether the resulting value reflected typical market conditions for similar properties.
That finding did not lead the committee to discard every part of the lower board’s work. It examined the record more closely where necessary, while retaining findings that remained sound.
The ruling is specific to the evidence supporting this 2025 assessment. It does not create a permanent warehouse classification or prevent an assessor from making a reasonably supported classification change in another year or case.
Separate size adjustment rejected
South Country also sought a large-warehouse obsolescence factor that would have applied had the property been valued using the cost approach. But it had not challenged the use of the income approach.
The municipality argued that importing the cost-model factor would combine different models and double-count obsolescence. The committee agreed that the requested factor was developed for cost-based assessments, not the income method used here. It also accepted that regression testing could indicate whether an adjustment or capitalization-rate grouping based on building size was warranted. That was not the adjustment MNP had requested.
A separate evidentiary ruling did not determine the outcome. The committee excluded a new chart and related argument offered by the municipality because the information had been available before the Board of Revision hearing and could have been presented there with due diligence. It expressly said its determination would not turn on that material.
The result was a classification-and-capitalization-rate remedy for 2025, not an additional cost-based reduction: warehouse treatment and a 12.21 per cent rate, with the size-adjustment challenge dismissed.
