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Learn how to lower taxes on your farm

Learn how to lower taxes on your farm

Producers who have forested lands or provincially significant features on their properties can access government programs

By Kate Ayers
Staff Writer

Farmland in Ontario is taxed between zero and 25 per cent of the residential rate, on the Municipal Property Assessment Corporation’s (MPAC) assessment.

For example, in Middlesex County, a producer who owns a 100-acre farm with a house on it paid $1,045 in property taxes in 2016, the Ontario Federation of Agriculture said. However, in 2020, this amount is expected to rise to $1,570.   

Farmers can manage increasing tax rates through such initiatives as the Managed Forest Tax Incentive Program (MFTIP) and the Conservation Land Tax Incentive Program (CLTIP). connected with industry experts to learn more about these two programs.

Managed Farm Tax Incentive Program

The MFTIP aims to increase landowner awareness about forest stewardship, an Ontario Woodlot Association article said.

It also brings greater fairness to the property tax system by acknowledging the value of forestland, the association said.

The provincial government established the program because “forest landowners were being taxed at high rates. This situation led to some property owners cutting their forests to increase short-term income, at the expense of the long-term forest health, which affects Ontario society,” Barb Boysen of New Leaf Forest Services in Maberly, said to 

“Anything that helps us keep forests on the landscape, with climate change (issues), is essential.”

The Ministry of Natural Resources and Forestry (MNRF) and MPAC administer MFTIP.

Landowners can voluntarily participate in this program. To be eligible, they must:

  • be a Canadian citizen or permanent resident
  • own at least four hectares (9.88 acres) of forested property on a single property in Ontario on one municipal roll number
  • prepare a managed forest plan and have it approved by a certified Managed Forest Plan Approver
  • ensure activities on the property must be carried out in accordance with “good forestry practices” as defined in the Forestry Act
  • have a minimum number of trees on each hectare (2.47 acres) of forest

A list of Managed Forest Plan Approvers can be found here.  

“The Managed Forest Plan sets out a 10-year plan for stewardship of the forest in accordance with good forestry practices and the landowner’s goals, such as recreation, sustainable forestry, wildlife management, or ecological restoration,” Jolanta Kowalski, the senior media relations officer for the MNRF, said to

Enrolled property owners must keep accurate records of their activities for scheduled progress reports.

“After five years, you have to send in a report saying (if) you are following the plan or not,” Boysen said.

The plan “can be as simple as monitoring your forest regularly to make sure that no one is trespassing … and otherwise protecting it.”

Those individuals who are eligible to enrol in this program have their land taxed at 25 per cent of the municipal tax rate for residential properties, the Ontario Woodlot Association article said. However, eligible property owners could save between 75 and 92 per cent on their taxes, depending on a variety of assessment and property-based factors, Kowalski added.

Landowners must submit applications by June 30 to have property taxes changed for the following year. More information on how to apply and required documentation is available on the Ontario government website.

Conservation Land Tax Incentive Program

Properties with important natural features are also eligible for tax exemptions under the CLTIP.

This program encourages landowners to care for provincially important natural areas, the Ontario government website said. The MNRF manages this program. 

To be eligible for the tax exemption, the area must be:

  • identified by the MNRF as an eligible land type, such as a provincially significant area of natural and scientific interest or a habitat for endangered species
  • 1/5 of a hectare (1/2 an acre) or larger in size

The landowner must:

  • commit to protecting the designated portion of the property
  • allow MNRF staff to inspect if requested

Through CLTIP, acreage containing eligible provincially significant natural features may qualify for a full property tax exemption. Houses and outbuildings cannot be included in the eligible area.  

“If a farmer wants to participate in the CLTIP program, in most cases, it is for land that he or she is not actively farming. So, generally swampy, forested or rocky areas that he or she perhaps couldn’t turn into farmland,” said Wade Knight of Small Timber Consulting in Ashton.

“The biggest benefit is the farmers’ contributions to the local surrounding ecosystems. They are helping their neighbours by maintaining these natural areas. And from a financial perspective, it’s zero taxes.”

For example, if a farm is 100 acres, of which 60 acres are cultivated and 40 acres are a provincially significant wetland, an enrolled landowner would only pay property taxes on the 60 acres of farmland, Kowalski added.

Landowners with eligible lands can voluntarily participate in the program and must apply annually by July 31 for the following year. 

“Annually, MNRF sends out applications to eligible households,” Knight said.

“If you’re not sure, call the MNRF with your municipal roll number to see if you qualify.”

More information on eligible land, the application process and how to stay enrolled can be accessed here.

For Will Wheeler, a rural property owner in Simcoe County, these programs have improved the aesthetics and productivity of his land. He has participated in the programs for over 20 years.

“There is more tree cover and shade and there’s more wildlife,” he said.

“Overall, I think the programs have increased the real estate value and intrinsic value. It’s a long-term proposition but forest conservation is a more productive use of the land.”

Wheeler worked with his local conservation authority and Managed Forest Plan Approver to ensure he had the proper documentation and met the government requirements.

Indeed, farmers can obtain tangible and economic benefits from these programs.

“Both of these programs can make it more affordable for farmers to own land which is not used for farm production, but which supports the overall health of the farm,” Kowalski said.

“Natural areas such as forests and wetlands can improve soil retention, slow runoff, provide wind barriers and habitat for pollinators, as well as providing benefits for farmers such as firewood harvest or recreation.”

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