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Do you qualify for a farm tax credit?

shutterstock_39391570It seems that I’ve been selling an increasing number of farm properties in the Simcoe area lately. Whether my clients are buying for business, or pleasure, these sprawling locals are very popular. However, owning a farm often comes at the cost of having to pay increased property taxes.

Fortunately, here in Ontario, there are a number of ways that can help you reduce the property taxes you pay on your farm.

In order to qualify for any, or all, of these programs, your farm will have to not only meet specific eligibility requirements, but you’ll have to apply and meet strict deadlines as well.

The first program you can apply for is the Farm Property Class Taxation Program.

Starting January 1998, the Farm Tax Rebate Program was replaced by a new Farm Property Taxation Policy for farm properties. Under the new tax policy, farm properties satisfying the eligibility requirements are identified for the Farm Property Class and are taxed at 25 per cent of the municipal residential tax rate. The farm residence and one acre of land, surrounding it, will continue to be taxed as part of the residential class.

In order to qualify, your property will need to be assessed as farmland by the Municipal Property Assessment Corporation, also known as MPAC. You must request this assessment, unless you’ve purchased the property from an owner who has already done so.

Your farmland must also be actively farmed by either yourself, or a tenant who has a farm business registration number in order for your land to be eligible for the reduced taxation rate. If you’re new to farming and don’t have the $7,000 gross income from farming required to get that number, you can apply for a start-up exemption to get yourself started.

Should you qualify for this program, a 100 acre farm, valued at $500,000, plus a house valued at $300,000, the owners could see a 75 per cent reduction to the value of the land, and thus the taxes paid.

For more information about this program and to apply, e-mail Ontario’s Ministry of Agriculture, Food and Rural Affairs at farmtax.omafra@ontario.ca or call 1-800-469-2285.

If you’re not a farmer, or using your land to farm, the Conservation Land Tax Incentive Program may be another option to help reduce your taxation rate. Providing property tax relief to landowners who agree to protect the heritage values of their property, this program supports the long-term private stewardship of our significant conservation lands. In order for your land to qualify, it must be identified by the Ministry of Natural Resources as provincially significant. If your land qualifies, the Ministry will send you the application each summer.

Properties that feature 10 acres or more of forest land, whose owners agree to prepare and follow a Managed Forest Plan for their property can also qualify for a Managed Forest Tax Incentive.

Whether you’re looking for a farm, recreational property, or a home, I can help. Call my office at 289-338-0767 to talk.


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