Happy Returns: Rural Tax Credits
As a country property owner you may be eligible to apply for one of three Ontario tax savings programs – and start your journey as a steward of the landscape.
If you’re new to the countryside, you’ve probably already encountered a few of the clever insider secrets of rural living. The best local farm stand for fresh eggs. The art of the low-key hand wave to neighbours as you pass in a car. And the least busy Bruce Trail entrance points.
If you own an acreage, we have three more for you – money-saving tax incentive programs which may put a smile on your face. That they happen to help preserve some of the most beautiful natural landscapes, farmland and forests in Headwaters is an excellent bonus. You may be a contender for multiple programs, but you’ll have to ask program administrators directly about applying for more than one. Here’s some information to get you started.
Conservation Land Tax Incentive Program
This program supports the long-term private stewardship of Ontario’s most important natural areas. Administered by the Ministry of Northern Development, Mines, Natural Resources and Forestry, this program could mean a tax exemption if at least a half acre has eligible features mapped by the province. These include areas of natural and scientific interest (ANSI), significant wetlands or a designation as part of the Niagara Escarpment Plan (NEP). You may be eligible for a 100 per cent exemption on the eligible portions of land.
If approved, you agree to protect the designated area and allow the ministry to inspect if requested. There is no cost to apply – the deadline is July 31 for the following tax year – and if accepted you must reapply annually. The ministry mails applications to eligible homeowners. If you think you’re eligible, but haven’t received one, visit ontario.ca/page/conservation-land-tax-incentive-program or email [email protected].
Managed Forest Tax Incentive Program
This initiative, which also falls under the natural resources ministry, recruits eligible property owners to take good care of their wooded areas. Once your property is classified as “managed forest,” you will pay only 25 per cent of your usual tax rate. Among the criteria: You must own 9.88 acres or more of forested land on a single property and have a minimum number of trees – 400 trees per acre is the general requirement, but varies with tree size.
You will need to hire a professional managed forest planner to draft a 10-year plan detailing how you will conscientiously manage your property with activities that may include planting native tree species, thinning, harvesting, and limiting disturbances in environmentally-sensitive areas.
Your managed forest planner will work with you to develop a plan and help submit your application to the ministry. The deadline is June 30 for the following tax year. You are required to provide a progress report every five years and a new management plan every 10 years. Visit ontario.ca/document/managed-forest-tax-incentive-program-guide or email [email protected].
Farm Tax Program
Agricorp is the provincial government agency created to provide risk management programs and services to the agricultural industry. It oversees the Farm Tax Program – which can significantly reduce property taxes if you own farmland that you or a tenant farmer works professionally.
Usually the sale of a property will trigger an application being sent to you. There is no application fee, but you’ll need to submit the farm’s most recent Municipal Property Assessment Corporation (MPAC) assessment of value (due to the pandemic, assessments for the 2022 and 2023 property tax years will continue to be based on January 1, 2016 values), and information on who is farming. You or the tenant should be making a minimum annual gross farming income of $7,000, although there are some exceptions to this rule. (One is if you are a startup business.)
If your property is deemed eligible Agricorp will inform MPAC of the change and MPAC will inform your municipality. Your residence and one acre of land surrounding it will be taxed at your municipality’s residential tax rate. The farmland and associated outbuildings considered part of the farm tax class will be taxed at no more than 25 per cent of that rate. (According to MPAC, depending on your use of the land, portions of your farm property may be assigned other classifications, which will affect your property’s overall valuation.)
You do not need to reapply annually if you keep your or your tenant’s Farm Business Registration (FBR) number current and meet other requirements. You do need to inform Agricorp of any changes that could affect your property’s eligibility (i.e., land use, property rental arrangements, farm business structure), and in most cases they will assist in determining what’s required for you to remain in the program. Visit agricorp.com or email [email protected].
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