By Connor Lynch
Farmers might notice the cost of renting land going up more than they expected this year.
That’s because of a more-than two-decade-old rule that MPAC has recently dusted off.
The rule only affects farmers renting land from non-farmers. When a non-farmer rents out farmland with bush or woodlot on it, the acreage with bush or woodlot on it is zoned residential and doesn’t qualify for the farmland tax exemption.
Since the farmland exemption caps the farmland tax rate at 25 per cent of the residential tax rate, the property tax bill for that marginal land quadruples. For the vast majority of municipalities in Ontario, the rate is 25 per cent.
That cost has been getting passed on to farmers in the form of increased rent, said Ontario Federation of Agriculture senior policy analyst Ben LeFort.
The OFA wants the Ministry of Finance to step in, since it gives MPAC its marching orders. The goal is to have the policy state that, if another use of the marginal land has not been clearly identified, it would remain classified as farmland.
The issue flared up once before, in 2009, when a similar spike in farmland assessments happened in Ontario. A spike in assessments meant MPAC was getting a lot of requests for revaluations, and doing a lot of inspections. That meant the organization was looking much more closely at a lot more properties than it normally would be.
It’s flared up again because of the spike in property values that happened in 2016 in Ontario, and will likely increase through the spring and early summer as landowners get their tax bills, said OFA president Keith Currie.
Although the OFA will be looking to meet with the Ministry of Finance on the issue, don’t expect anything until at least after the provincial election in early June, Currie said. “Finance is (currently) up to its neck getting ready for the budget,” and once that’s done the ministry has until the end of the year before taxes become a pressing issue for them again.
