FARM ASSESSMENTS AND TAXES

Presented by Ben Le Fort, Senior Policy Analyst, OFA Farm Property Assessment: New Assessments Released

 MPAC responsible for determining the assessment value for all properties in , Including Farm property.  Every four years, MPAC updates property assessments to reflect Jan 1st valuation date.  PAN’s mailed to all farm property owners Oct 11th 2016.  The newest assessments are valued as of Jan 1st 2016.  Increased assessments phased in equally over the four year assessment cycle: 2017-2020.  PAN’s redeveloped with input from OFA and farm focus groups. Impacts on Property Tax

 If Municipal governments choose not to act, there will be a shift of property tax Burden onto Farmland Property owners.  How much of an impact will depend on the increase in Farmland values relative to other Properties (residential, commercial, industrial).  The more disproportionate the increases in farmland values are in your county, the more tax burden will be shifted to farmland property owners. Impacts on Property Tax Simcoe County

 In Simcoe County Farmland CVA has increased by 58%  Residential values of Increased by just over 19%  Once New Assessments Phase in, increase in Farm Tax Burden is as follows Year % of Total tax from farm $ increase in Farm Tax Burden

2016 1.2% 2017 1.4% $149,925 2018 1.5% $296,825 2019 1.6% $473,294 2020 1.65% $649,763

Total $1.57 Million Impact at the Individual Farm Level 2016-2020

 500 Acre farm with Farm residence  On farm Residence + 1 acre of land Taxes – 2016: $784 – 2020:$1,310 – 67% increase in on farm residence taxes  Bare Farmland Taxes – 2016: $6,625 – 2020:$13,300 – 101% increase in farm tax Avoiding a Shift in Property Tax Burden

 To avoid a property tax shift onto farmland property owners your local county governments will need to adjust the Farm Property Tax Ratio below the current 25% of residential taxes.  How much they need to adjust the tax ratio will depend on the assessment changes in your county.  County governments have full authority to adjust the farm tax ratio anywhere between 0%-25% of the local residential tax rate each year. Tax Fairness

 Over a 4 year period, farm taxes are set to increase by an average of 51%  Despite a 51% increase in property taxes, farms in Simcoe county use the same amount of services as they did 4 years ago.  2020 will be the final year of the current assessment cycle  Simcoe county can provide temporary tax relief for farmers through an adjustment in the farm tax ratio  In 2021, new assessment will be phased in at which point Simcoe county could adjust the farm tax ratio upwards if residential increases outpace farm. Other Upper/Single Tier Municipalities that have addressed This Issue  Oxford 0.235  Hamilton 0.1767  Elgin 0.23  Ottawa 0.20  Norfolk-0.23  Caledon 0.1689  Dufferin 0.23 (0.22-2020)  North Bay 0.15  Prince Edward 0.2319  Halton Region 0.20  Grey-0.24  Region of Durham 0.20  Lambton 0.226  Kingston- 0.2375  London 0.1752  Brant 0.24  Chatham- Kent 0.22  Lennox and Addington- 0.23 Farm Tax Ratio Required in Simcoe County

 To Maintain the existing farm tax burden – 2020: 0.236  To return farm tax burden to 2016 levels – 2020: 0.192 Minimal Impact on other Property Classes: 2020

 If the farm tax ratio was lowered to 0.236 the impact on residential properties would be $0.27 per $100,000 in assessed value in County taxes  If the farm tax ratio was lowered to 0.192 the impact on residential properties would be $1.23 per $100,000 in assessed value in County taxes  While the impact on residential and other property classes would be insignificant, this would represent much needed relief for farmers in Simcoe county.