Metro Vancouver and the Fraser Valley is home to the best farmland in BC, and some of the best farmland in Canada. Our region also has the highest overall population density in the province, and some of the most valuable land.
In order to encourage farming throughout BC, the provincial government provides a reduction of property tax for land that is used for farming. Municipalities can also provide a reduction in property tax.
|Examples of differences in property taxes with and without Farm class. Select table to enlarge.|
In order to qualify for the farm property classification, certain requirements must be met. One of the requirements that is evaluated is the amount of revenue generated by farming. The evaluation is based on the following formula:
For farms under 2 acres, $10,000 in sales must be generation from farming. For a farm between 2 acres and 10 acres, $2,500 in sales must be generated from farming to qualify for farm status. For farms larger than 10 acres, minimum sales must be $2,500 plus 5% of the farmland value.
In Metro Vancouver, there are people who own large lots with large estate housing that have “hobby farms”. These farms qualify the large lot, large house owners for a massive reduction on their property tax bill. The thought is that these small scale farming operations do not providing the same sociality benefit as larger scale farming operations. In Metro Vancouver, the $2,500 threshold for land between 2 and 10 acres could be too low.
Metro Vancouver recently released a study it commissioned called “Farm Tax Class: Income Threshold Investigation.” Based on their investigation of farming in Metro Vancouver, the authors of the study suggested the following three items for potential action:
- Increase Farm Income Thresholds, and Set a Single Threshold for all Parcel Sizes in Metro Vancouver: This value should be between $3,700 and $7,500.
- Consider a Multi-Level Taxation Tool to Further Distinguish between Hobby Farms and Commercial Operations: Commercial and Hobby Farms would be assigned different farm classes, and would quality for different property tax rates and reductions.
- Expand the Farm Income Threshold Policy Discussion.
While it is great that Metro Vancouver commissioned this report, the provincial government would be the only order of government that could act on these recommendations.