How we assess farm properties
To assess your farm property, we compare it to similar farm properties that have sold in your area. We also consider a number of other factors, such as the quality and use of the land, and the age, quality and use of the buildings and structures. Below is more information on the factors we take into consideration.
Overview of factors affecting your farm property value
We start our assessment of your farm property by comparing it to open-market, arm's-length sales of farms to farmers who intend to keep using them as farms.
We look at your farm's soil classification and other details of the property. There are a number of factors that affect your farm property's value. Our video, How MPAC assesses properties, offers a good overview.
The key factors are:
- farmland (sales)
- residence land
- farm outbuildings
- other buildings or structures
Key factors that affect your farm property's value
All farms in Ontario are assigned to a farm "neighbourhood" based on common factors such as climatic zone, soil type and suitability, and comparable properties selling for similar prices per acre. Within each farm neighbourhood, adjustments are made to reflect different soil quality classification.
We use an approach called the "direct comparison approach", which compares your farm property to similar farmland in your area that has been sold. Some sales aren't useful for determining your property's value, (see below for more information).
We also consider your farm's climatic region, soil type/suitability and similar farmland markets.
Comparing sales of similar farms
Using land title documents registered at Ontario Land Registry Offices, we gather the following farm property sales information:
- owners' names
- the legal description
- sale amount
- sale date
Valid farm sales for the purpose of MPAC property assessments
- The buyer is a farmer operating a bona fide farm operation, or the buyer has commenced operating a bona fide farm operation for the first time.
- The sale is an arm’s-length transaction in the open market.
- The property had a reasonable period of time for exposure to the market.
- The sale amount is expressed in terms of money.
Sales that can't be used for the purpose of MPAC property assessments
- Transactions between family members or between a parent company and its subsidiary.
- Forced sales (e.g. bankruptcy of vendor).
- Speculative sales (e.g. sold by a farmer to someone anticipating a future use of the property other than farming).
Farm land quality classifications
We consider different soil types and textures when assessing the agricultural value of your farm property.
We classify farm soil under one of six quality classes based on how productive it can be. The factors we consider for classification include:
- soil texture
- depth to bedrock
For detailed information about land quality and climactic zone qualifications, please see our Farm Property Methodology Guide.
We consider the:
- dimensions of your farmhouse
- type and quality of construction
- age of the residence
- how much it would cost to rebuild it
3. Residence land
If the farmer lives in the house, then we assess one acre of the land supporting the house as farmland. If the house is rented to a non-farmer, the acre of land is considered residential property, and is assessed accordingly
4. Farm outbuildings
We look at the cost of replacing these buildings while considering:
- type and quality of construction
- age of each structure
- how much it would cost to rebuild each
5. Other buildings
Other buildings on farm property, such as wineries and stores, are classified according to their use (commercial, industrial, etc.). We look at the cost of replacing them while considering:
Other factors that can affect your assessment
Multiple property classifications
Depending on your use of the land, portions of your farm property may be assigned other classifications, which will affect your property's overall valuation.
For example, if a portion of your farm is used for purposes other than farming (e.g. vehicle-repair garage), that portion is classified according to its current use, and will be assessed accordingly.
Structures on the property
The structures you have on your property can also affect how we assess various portions of it. We use the following codes to categorize your property and structures:
- Primary and secondary structure codes describe the type of primary structure (usually your home), and the secondary structures on your property.
- Residential structural features describe key details about your home, such as the number of bathrooms, and whether you have central air or a finished basement.
Information gathered from other sources
We also review information about your property we gather from:
- property inspections
- land title documents
- building permits
- sales questionnaires
We may visit your property in person. This way, we can ensure that we have up-to-date information about it. The details we collect may include photos of the property and will be added to our database.
We will make an in-person inspection of your farm property if:
- A building permit is issued by your municipality.
- Your farm property is sold. This inspection is known as a "sales investigation".
- We need to do an assessment update.
- You submit a Request for Reconsideration.
- You file an appeal with the Assessment Review Board.
If you have any questions about how we assess farm properties, please feel free to contact us.