Concerns raised over rising farmland values

January 25, 2013
Written by By Mark Wales, President, Ontario Federation of Agriculture
Jan. 25, 2013, Guelph, Ont. – Farmland values are on the rise in many parts of Ontario, and farmers could feel the aftershocks in their 2013 property tax bills.

Farmland values have significantly outpaced residential values, pushing farm taxes higher if not adjusted fairly. The pending increase puts farmers on the hook for a significantly larger share of the bill for municipal services and infrastructure.

Municipalities set the farm tax rate as a percentage of the residential tax rate. The farm tax rate is intended to reflect the lower level of municipal services and infrastructure required by those properties.

For example, a field of corn or pasture does not require services such as water or sewer treatment, library services, public health services, garbage pick-up or curbs and streetlights.

Farmers pay residential tax rates for their residence plus one acre of their land.

Municipalities have a delicate balancing act to perform when it comes to setting tax rates for residential properties and their farmland counterparts.

Increases in farmland values compared to housing prices will result in a tax burden shift onto farm properties unless municipalities act to balance the share of taxes fairly between residential and farm tax rates.

Municipalities have the authority to set farm class tax rates at a maximum of 25 per cent of the residential tax rate, but the provincial government has given them the flexibility to set it lower than 25 per cent.

And, if municipalities are to avoid a tax burden shift onto farmland class assessment base, that’s exactly what needs to happen over the next four years.

The Ontario Federation of Agriculture is working closely with our 52 county federations across the province to equip members with the tools they need to bring their concerns to municipalities across Ontario.

It’s time the municipalities give due consideration to where residential tax rates need to be to fund their fair share of services and infrastructure, and adjust the overall weighting of farm tax rates to reflect a fairer proportion of the bill.

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