Farm Assessments Raise Eyebrows and Taxes

Jeff Green | Oct 26, 2016

Waterfront property owners in this region have seen their property values decrease ever so slightly since 2012, but there is another category of rural property that has seen an increase - farmland.

According to the Municipal Property Assessment Corporation (MPAC), the value of farmland in Ontario has increased by 16% since 2012. MPAC provides property assessment to municipalities in Ontario, which are then used to determine how much tax each property owner must pay.

This contrasts sharply with other categories in the region. In Frontenac County, residential properties are up an average of 1% or less and waterfront properties are down by less than 1%.

The new assessments will be implemented over the next four years. They were mailed out on the week that started on October 10, and arrived at most farm properties late last week.

MPP Randy Hillier has received about a half a dozen complaints from farmers in Frontenac and Lanark County since then about the assessments going up by large amounts, 50% or more in a couple of cases, according to his executive assistant, David Shostal.

“MPAC says these increases are the result of market trends, but I’m not aware of any trends that warrant spikes like we’re seeing,” Hillier said in a release that came out over the weekend. “You can appeal your assessment,” he added, “but there is a deadline for filing a Request for Reconsideration (RfR), so if you want to appeal, you need to get your RfR application in to MPAC as soon as you can.”

One of the farm owners who contacted Hillier was Steve Leonard from Hartington.

“The farm part of my property has gone from $171,600 in 2012 to $347,700 in 2016,” he said in a phone interview on Monday night, October 24.

Leonard owns a 94-acre farm, which happens to be located next to the grant subdivision proposal that has been the centre of controversy within the hamlet and is going to a hearing of the Ontario Municipal Board in May.

The land has been in the Leonard family since the 1840s. Leonard, who is a mason by trade, used to run a cow/calf operation on the property, but now uses his land for hay production (30 acres) and for a small hog farming operation. He recently began growing strawberries and raspberries but did not get a crop this year due to lack of rain.

Although his farmland is ranked as Class 1, he does not see how the increased assessment can be justified based on the productive value of his property.

“They said in my assessment notice that the assessment was based on sales of comparable properties, but when I looked it up I didn't find any examples of sales, so I can't see where they got the value they used,” he said.

Farm properties pay a tax rate that is 25% of the residential rate, so the $370,600 farm property will pay the same tax as an $85,150 valued home, which will be in addition to the tax Leonard pays for his house and 1 acre of land that is taxed at the residential rate. All in all he is looking at a major increase this year, since the assessed value of his house went up as well.

“Farming is hard enough without this kind of stuff,” he said.

Leonard said that he intends to appeal his assessment.

There is another option that is available, and that is to lobby the local government.

The Township of South Frontenac and/or Frontenac County, which both collect taxes on farm property, have the discretionary authority to charge less than 25% of the residential rate to farm properties within their jurisdiction.

Steve Leonard said his first idea is to challenge the value that MPAC has placed on his 94-acre farm.