The sole property assessor in Ontario outlines how it values and classifies residences
By Kate Ayers
The Municipal Property Assessment Corporation (MPAC) considers many factors when classifying and assigning values to farm properties.
MPAC is the only assessment authority in Ontario responsible for assessing all properties in the province in accordance with the Assessment Act and regulations established by the Government of Ontario, Karen Russell, the corporation’s director of valuation and customer relations for western Ontario, said to Farms.com.
“Our assessors are the experts in the field. They use their evaluation and appraisal knowledge, applying industry standards and best practices,” she said.
MPAC conducts a province-wide assessment update every four years. The corporation sends assessment notices to every property owner in Ontario during the assessment year.
The organization last updated assessed values in 2016. Municipalities use these updated property values as the basis for determining an individual’s property taxes from 2017 through to 2020, MPAC’s website said.
“When we assess every four years, there is a phase-in provision in the Assessment Act for properties that have increased in value. We gradually phase-in the property value over four years so there isn’t a significant property tax increase all at once,” Russell said. (To learn more about the phase-in provision, watch this video.)
“If a property value decreases, this new value is applied immediately.”
The five factors that MPAC considers when determining farm values are farmland, residence, residence land, farm outbuildings and other buildings.
“When we assess farms, we collect data on sales of farmland to farmers. Sales of farms to purchasers who intend to use the farm for other purposes aren’t included” in our sales analysis, Russell said.
“We value farmland by how productive it can be, using six property classes. Class one is the most productive and therefore the most valuable class of farm.”
To classify and value farms, MPAC created geographic areas, based on the climatic region, soil type, suitability and market trends for a given area.
MPAC assigns a value to the residence based on the cost to rebuild the farmhouse, less any depreciation. Assessors also consider the location, size, age and quality of construction, the corporation’s website said. The corporation establishes a replacement cost of the outbuilding(s) based on the same premises as the residence assessment.
In addition to valuation, MPAC staff also classify every property in Ontario. Properties fall into seven major classes: residential, multi-residential, commercial, industrial, pipeline, farm and managed forests.
“By default, farm properties are classified in the residential property class,” Russell said.
“If farmland meets the eligibility requirements as determined by OMAFRA, … farmland is taxed up to 25 per cent” of the municipal residential tax rate, she said.
This tax reduction is enacted by the Farm Property Class Tax Rate Program, OMAFRA’s website said. MPAC places farm outbuildings in this property class as well.
MPAC classifies the farmhouse and one acre of land surrounding it as residential. If the resident is a farmer, MPAC values the surrounding one acre at the farmland rate.
The Farm Forestry Exemption may apply to farmland as well. One of every 10 acres of farmed property may be eligible for this exemption, the MPAC website said. This exemption cannot be used in combination with the Managed Forest Tax Incentive Program or the Conservation Land Tax Incentive Program.
Farmers can increase their properties’ values in several ways.
Activities “that could affect the property value of farmland would be the construction of a new building, improvements to existing buildings or residence, increasing the land base used for farming purposes, … or converting land used for farm buildings into residential, commercial or industrial purposes,” Russell explained.
Some people may receive property assessment notices in non-assessment update years. This situation could occur if buildings are constructed, renovated or removed, or if the land use has changed. Any changes to a property will be reflected in a new notice that is sent out, Russell said.
MPAC also has a resource on its website called AboutMyProperty.ca. This resource allows property owners to learn how their properties were assessed and the information MPAC has on file about buildings, land class, and acreage. Individuals can also compare their assessment with other properties in the area.
“When property owners get assessment notices at any time and they have questions … or there have been changes, we want to work with them to make sure we address any concerns that they have,” Russell said.
All property owners can use the roll number and access key on their assessment notices to sign into the aboutmyproperty.ca to view this information or they can call MPAC’s Customer Contact Centre at 1-866 296-6722 between Monday to Friday from 8 a.m. to 5 p.m. EST to speak with a representative.
“It is important that farmers are aware that we are here to work with them to make sure the assessment is fair and transparent,” Russell added.
If property owners disagree with the property value MPAC assigned, they can file a Request for Reconsideration (RfR). The corporation will review the assessment free of charge. The deadline to file a RfR is included on the assessment notice.
“If an individual still disagrees, they can also file an appeal to the Assessment Review Board, which is an independent adjudicated tribunal,” Russell said.
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