Farm properties include a large variety of working farms, farmland, farm outbuildings, specialized farms (e.g. poultry, ginseng), fruit or nut orchards, etc., and often have a residence located on the farm which is occupied by the owner/farmer.
Every four years, property owners receive a Property Assessment Notice when MPAC completes a province-wide Assessment Update based on the legislated valuation date. In 2016, MPAC updated the assessed value of every property in Ontario with a January 1, 2016 valuation date.
The value indicated on your 2016 Notice is used by your municipality/local taxing authority as the basis for calculating your property taxes for the 2017-2020 property tax years.
In the Assessment Act, an increase in assessed value is phased-in over four years. A decrease in assessed value is introduced immediately. Learn more about phase in.
Assessing Farm Properties
Our assessors are trained experts in the field of valuation and apply appraisal industry standards and best practices.
We undertake extensive analysis to determine farmland values and use only sales of farmland sold to farmers used for farm purposes, as legislated by section 19(5) of the Assessment Act.
Agricorp is assuming the role of primary point-of-contact for the Farm Property Class Tax Rate Program, also known as the “Farm Tax Program,” effective February 25, 2019.
Factors in Determining Farm Values
We look at these factors:
- We collect the data on sales of farmland to farmers. Sales of farms to purchasers who intend to use them for other purposes are not included.
- We classify farmland according to how productive it can be, and place it into one of six quality classes. Class 1 farmland is the most productive and therefore the most valuable class of farmland.
- We also establish geographic areas according to climatic region, soil type/suitability and similar farmland markets.
- We consider how much it would cost to rebuild the farm house and take into consideration the location, size, age and quality of construction.
- If the farmer lives in the residence, one acre of land supporting the residence is valued as farmland and is classified as residential. If the house is rented out to a non-farmer, any land that is used by the occupant is assessed as residential land and is classified as residential.
- We establish the replacement cost of the outbuildings, taking into consideration the design, age, size and quality of construction.
- We value other buildings, such as wineries and stores, according to the cost of replacing them, taking into consideration the building’s design, age, size and quality of construction. They are valued and classified according to use (e.g., commercial, industrial, residential).
In addition to valuing properties, we also classify every property in Ontario.
There are seven major property classes: residential, multi-residential, commercial, industrial, pipeline, farm and managed forests. There are also several subclasses for properties with specific or unique characteristics.
Residential Property Class
- By default, farm properties used for farm purposes are classified in the residential property class in accordance with section 3(1)2 of Ontario Regulation 282/98 of the Assessment Act.
Farm Property Class
- Farm properties that meet the eligibility requirements will have farmland and associated outbuildings placed in the farm property class and are taxed at up to 25% of the municipal residential tax rate. An application for inclusion in the Farm Property Class Tax Rate Program must be approved by Agricorp.
Farm Forestry Exemption
- A Farm Forestry Exemption (FFE) may also apply to the property. Under Section 3(19) of the Assessment Act, one acre of every 10 acres of farmed property may be entitled to receive this exemption. FFE is warranted if the property is assessed as a farm and the property has some forested or woodland portion that is not subject to either the Managed Forest Tax Incentive Program (MFTIP) or the Conservation Land Tax Incentive Program (CLTIP).
Small-Scale On-Farm Business Subclasses
- Farms with a commercial and/or industrial facility on the property may be eligible for the small-scale on-farm business subclasses if it is an extension of the farming operation. The commercial and industrial subclasses provide a tax rate that is 75% lower than the industrial or commercial tax rates.
- To qualify, 51% of the facility must be used to sell, process or manufacture a product produced on the farmland. If the commercial and/or industrial operation has an assessed value equal to or greater than $1 million, it is not eligible for the small-scale on-farm business subclasses (O. Reg 361/18) of the Assessment Act). Learn more about this initiative here.
- If a portion(s) of a farm is used for purposes other than farming (e.g. auto repair garage), that portion is classified according to its current use. This is to ensure the appropriate tax class is applied to the various uses of the property.
Non-Assessment Update Years
In non-Assessment Update years, MPAC continues to review properties to ensure our records are accurate and up to date. For example: homes are constructed, renovated or added on to, buildings are added or removed from a property or there is a change in use on a property. Any change to a property during the year will result in a new Notice being mailed to reflect the changes.
Questions about your assessment?
Visit aboutmyproperty.ca to learn more about how your property was assessed, see the information we have on file, as well as compare it to others in your neighbourhood. Look for your Roll Number and Access Key on your Property Assessment Notice to register.
If you still disagree with your property’s assessed value or classification, we will review your assessment free of charge through a Request for Reconsideration (RfR). Your deadline to file an RfR with MPAC is included on your Property Assessment Notice. Learn more about your assessment.