Procedures for Farmland Property Assessment in Ontario
How MPAC assesses properties
MPAC’s job is to accurately classify and value properties in Ontario in compliance with the Assessment Act and regulations established by the Ontario Government.
To establish your property’s assessed value, MPAC’s assessment professionals analyze property sales in your area. These sales provide the basis for assessed values. Our experts work in our 33 offices located across the province and they understand local real estate markets.
We continually collect and update detailed information for every property in Ontario to ensure that similar property types are valued consistently within the market area.
This method is called Current Value Assessment. It is used by most assessment jurisdictions in North America.
In addition to sales, our experts regularly analyze property information through a number of sources, including:
- land title documents;
- building permits;
- on-site property inspections and communication with property owners; and
- sales questionnaires mailed to all farm purchasers.
MPAC’s database contains over two billion pieces of data, and is one of the most detailed in the world. Like all assessing authorities, MPAC is able to determine accurate values for large groups of properties based on common data and mass appraisal techniques.
Assessing Farmland Properties
Accurate farmland values in Ontario are determined by extensive analysis, using only farmer-to-farmer sales as legislated by section 19(5) of the Assessment Act. Farm values are based on the land’s productive capability and other factors such as climate and location. It’s important to note that the assessment of a farm is not based on the land’s potential use (e.g., development).
Factors in Determining Farmland Value
Properties that are farmed by the owner and/or tenant are valued using rates based on bona fide farmer-to-farmer sales. The primary components that will make up a farm’s assessment are:
- Farmland - Farmland is assessed according to its productivity value, that is, the ability of the land to produce crops and/or maintain livestock. Productivity rates are established by considering such factors as soil texture, topography, drainage and depth to bedrock.
- Residence- The value of the residential structure is determined by establishing a replacement cost of the improvement(s) less any depreciation.
- Residence Site - If a farm residence is occupied by the person(s) farming the property, a one-acre parcel of land is valued at the farmland rate. The farm residence and one-acre parcel is classified in the residential tax class. If the residence is occupied by someone other than the person(s) farming the property, it is considered a non-farm residence and any land, or portion of the land, not being farmed is valued at residential land values.
- Farm Outbuildings - A farm outbuilding is any improvement, other than a residence, that is used for farming operations (e.g., barn, silo, grain bin). Outbuildings are valued based on their design, quality of construction and size.
- Other Buildings - All other buildings (e.g., retail store) not used in the farm operation are valued based on their design, quality of construction and size. Other buildings are classified according to their use.
There are seven major property classes: Residential, Multi-Residential, Commercial, Industrial, Pipe line, Farm and Managed Forests. There are also several sub-classes for properties with specific or unique characteristics.
Farm Property Tax Class
The Farm Property Tax Class includes farmland and farm outbuildings. Although MPAC may assess a property as a farm, it is taxed at the residential rate unless placed in the Farm Property Tax Class by the Ontario Ministry of Agriculture, Food and Rural Affairs.
Additional information about the Farm Property Tax Class is available on the Internet at
http://www.Ontario.ca/MFTIP or by contacting the Ontario Ministry of Agriculture and Food at 1 800 469-2285.
When your municipality/local taxing authority sets property tax rates, they will be applied to the assessed value to determine your property taxes. Education tax rates, which are set by the Ontario Government, will also be applied to the assessed value.
We want to make sure the classification and assessed value of your property is accurate. If you don't think they are, call us.
To Learn More
You can obtain detailed information about your property and information on up to 24 additional properties of your choice and up to six selected by MPAC, free of charge. Your written request can be sent to:
P.O. Box 9808
Toronto ON M1S 5T9
Fax: 1 866 297-6703
Note: The information contained in this brochure has been developed to provide the public with a general understanding of the legislation respecting the assessment of farmland properties. The applicable law prevails to the extent there is any conflict between this brochure and the current law. This brochure is not intended to provide legal advice and should not be relied upon as such.
Click here for a printable PDF version of the Farmland Property Assessment Brochure.