Procedures for Farmland Property Assessment in Ontario
- How MPAC assesses properties
- Property Information
- Assessing Farmland Properties
- Factors in Determining Farmland Value
- Property Classification
- Farm Property Tax Class
- To Learn More
How MPAC assesses properties
MPAC's job is to accurately classify and value properties in Ontario in compliance with the Assessment Act and regulations established by the Ontario Government.
To establish your property’s assessed value, MPAC’s assessment professionals analyze property sales in your area. These sales provide the basis for assessed values. Our experts work in our 33 offices located across the province and they understand local real estate markets.
We continually collect and update detailed information for every property in Ontario to ensure that similar property types are valued consistently within the market area.
This method is called Current Value Assessment. It is used by most assessment jurisdictions in North America.
In addition to sales, our experts regularly analyze property information through a number of sources, including:
- land title documents;
- building permits;
- on-site property inspections and communication with property owners; and
- sales questionnaires mailed to all farm purchasers.
MPAC’s database contains over two billion pieces of data, and is one of the most detailed in the world. Like all assessing authorities, MPAC is able to determine accurate values for large groups of properties based on common data and mass appraisal techniques.
Assessing Farmland Properties
Accurate farmland values in Ontario are determined by extensive analysis, using only farmer-to-farmer sales as legislated by section 19(5) of the Assessment Act. Farm values are based on the land’s productive capability and other factors such as climate and location. It’s important to note that the assessment of a farm is not based on the land’s potential use (e.g., development).
Factors in Determining Farmland Value
Properties that are farmed by the owner and/or tenant are valued using rates based on bona fide farmer-to-farmer sales. The primary components that will make up a farm’s assessment are:
- Farmland - Farmland is assessed according to its productivity value, that is, the ability of the land to produce crops and/or maintain livestock. Productivity rates are established by considering such factors as soil texture, topography, drainage and depth to bedrock.
- Residence- The value of the residential structure is determined by establishing a replacement cost of the improvement(s) less any depreciation.
- Residence Site - If a farm residence is occupied by the person(s) farming the property, a one-acre parcel of land is valued at the farmland rate. The farm residence and one-acre parcel is classified in the residential tax class. If the residence is occupied by someone other than the person(s) farming the property, it is considered a non-farm residence and any land, or portion of the land, not being farmed is valued at residential land values.
- Farm Outbuildings - A farm outbuilding is any improvement, other than a residence, that is used for farming operations (e.g., barn, silo, grain bin). Outbuildings are valued based on their design, quality of construction and size.
- Other Buildings - All other buildings (e.g., retail store) not used in the farm operation are valued based on their design, quality of construction and size. Other buildings are classified according to their use.
There are seven major property classes: Residential, Multi-Residential, Commercial, Industrial, Pipe line, Farm and Managed Forests. There are also several sub-classes for properties with specific or unique characteristics.
Farm Property Tax Class
Farm Forestry Exemption (FFE)
The Farm Forestry Exemption (FFE) is granted under Section 3. (19) of the Assessment Act. The exemption seeks to protect wooded acreages on farmlands in recognition of the contribution those forested areas provide to the environment, soil drainage and preservation, and the overall farm operation.
Farmed property is entitled to receive this exemption if the following conditions are met:
- the property is assessed as farm
- the property has some forested or woodland portion
- portions currently in the Managed Forest Tax Incentive Program (MFTIP) or Conservation Land Tax Incentive Program (CLTIP) are not eligible for FFE
How is the Exemption Calculated?
One acre used for forestry purposes for every ten acres of the farm may be eligible for exemption.
Some of the key factors for FFE eligibility are:
- there must be a stand of trees of the varieties set out in section 19(8) of the Assessment Act
- the forestry exemption cannot exceed 20 acres under individual ownership in any one municipality
- in instances where there are two or more portions of forested land of different soil classes, the exemption will be based on the values of the highest rated land
- in determining the number of acres to be exempted, the total acreage of the farm(s), rather than the total acreage of the treed area, is to be used
- where the total acreage consists of more than one separately assessed property, all the properties should be treated as one to determine the exemption.
- the exemption shall be apportioned to each parcel in the pro-rated share that the acreage of each parcel is used for forestry purposes (bearing in mind the highest rated land as noted above), and
- the FFE area may not exceed total “Wooded Area” and will be rounded to two decimal places
- where land is leased to a farmer for farming purposes, the forested area must be included in the lease and the parcel acreage under lease will be used for calculation of the forestry exemption.
Need More Information
MPAC is pleased to answer any questions related to the assessment of farm lands and the application of the FFE. This application is automatic and currently not reflected on your Property Assessment Notice. Confirmation of the exemption can be obtained by contacting MPAC at 1 866 296-MPAC (6722) or 1 877 889-MPAC (6722) TTY.
To Learn More
You can obtain detailed information about your property and information on up to 24 additional properties of your choice and up to six selected by MPAC, free of charge. Your written request can be sent to:
P.O. Box 9808
Toronto ON M1S 5T9
Fax: 1 866 297-6703
Note: The information contained in this brochure has been developed to provide the public with a general understanding of the legislation respecting the assessment of farmland properties. The applicable law prevails to the extent there is any conflict between this brochure and the current law. This brochure is not intended to provide legal advice and should not be relied upon as such.
Information on this page may not be fully accessible. Please contact us at 1 866 296-6722 or 1 877 889-6722 TTY to determine how we can best accommodate you.