Assessment change prompts OFA concerns

Friday, October 16, 2009

by SUSAN MANN

Representatives of the Ontario Federation of Agriculture say the provincial corporation responsible for valuing Ontario’s properties has changed its interpretation of assessment legislation wording and that may eventually have an impact on farmers.

Property assessed as residential is taxed at about four times the rate of farmland.

A representative from Ontario’s Municipal Property Assessment Corporation denies there’s been a change. The corporation is being dogged by a mistake it made in the assessment of a southwestern Ontario farmer’s property, she says.

“Once we found out he was a bona fide farmer we changed it back and corrected his assessment,” says Rose McLean. The error “seems to be following us as if it’s a policy change. It never was.”

Jason Bent, a researcher with the Federation, says property owners began noticing the changes once they got higher tax bills based on assessments issued in the fall, 2008.

Those affected were owners of farm properties who did not farm. Portions of their property were assessed as residential rather than the entire property being valued as farmland.

Bent says the Federation received calls from property owners who have tenant farmers. “They are the ones who are getting caught in this because they have a tenant farmer who isn’t working the full acreage,” he says.

“MPAC believes that only lands that are actually being farmed qualify as farmland,” says Bent and notes that’s different from the legislation, which says land has to be used for “farm purposes” to qualify for the farmland property tax.

Corporation officials have changed their interpretation of that wording to farmland used for “farm activities,” he says.

Bent says the change has the potential to affect all farm properties. Most farms have areas that aren’t actively being tilled.

“The reality is that there’s no separate section here (in the legislation) for farmlands owned by non-farmers versus farmlands owned by farmers,” Bent explains. “Even though MPAC has started with properties owned by non-farmers that’s not where they will stop.”

Federation president Bette Jean Crews says, “you don’t have to actively be plowing the land to be farming it.”

The Federation wrote to Finance Minister Dwight Duncan in March asking him to direct the Corporation to “stick to the act, which says farm purposes,” Crews says. The OFA hasn’t received a response yet.

McLean says farmers needn’t be concerned. “If it’s a bona fide farmer who owns the property we would assess all his land as a farm,” she explains. This would apply to a retired farmer too. “That’s always been the case and it’s not changing.”

For non-farmers who own land they don’t farm, the Corporation doesn’t assess the entire property as farmland, she says. Land within the property that’s rented out for farming will, however, be assessed as farmland.

The Corporation wouldn’t carve out small sections of wetland, buffer strips or woodlot within a property and place them in the residential tax class. “We’re not talking about little strips here,” she says. “We’re talking about properties that are not farmed.”

Landowners who are just catching on to higher taxes now are well past their deadline to appeal for their 2009 assessment. They have until Mar. 31, however, to appeal to lower their 2010 taxes. BF