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 Ontario, 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.