posted by admin on Dec 6

B.C. eases farm-tax rules

Provincial government moves to encourage small-scale operations


NOVEMBER 28, 2009

Bill Bennett says higher taxes discouraged keeping land for agriculture.
Photograph by: Darren Stone, Times Colonist, Canwest News Service
The provincial government is eliminating controversial property-tax regulations on farmland to encourage development of more small-scale farms, Community and Rural Development Minister Bill Bennett announced yesterday.

So-called split assessments, which tax farmland at a lower agricultural rate but apply higher residential tax rates to undeveloped areas and home footprints on the same property, were deemed as deterring expansion of farming.

The revised rules compel local governments to tax entire properties at the lower agricultural rate if at least half the land is devoted to farming, or if at least 25 per cent of the land generates a specified minimum amount of income from farming for the landowner.

A primary reason for the change is to support more development of small-scale agriculture on the Saanich peninsula, Bennett said.

Jack Mar, Central Saanich mayor and longtime farmer, has mixed feelings about the new rules, however.

“The pro is it will take away the bureaucracy that small farmers have had to deal with,” said Marr, who grows fruit and vegetables on 55 hectares.

But Mar is concerned the low farm-income threshold of $3,500 could enable a homeowner on a half-acre residential property who sets up a flower stand at the end of the driveway to qualify as a farm. That could lead to reduced revenues for municipalities.

Marr said residential land is taxed at a rate 10 times greater than farm land. One property that Marr purchased had an annual tax bill of $200 when zoned for agricultural use, but $2,500 when zoned for residential.

Metro Vancouver’s regional government is concerned that elimination of the split assessment will open the door to unchecked monster-home construction on viable agricultural land.

It is also concerned that the change will force municipal governments to hike property-tax “mill” rates on all agricultural land in order to recoup tax revenue that will be lost, to the detriment of active farmers.

“We are concerned that removal of the split classification without some other means of limiting the size of the houses, could actually encourage construction of larger houses in agricultural areas,” said Richmond Coun. Harold Steves, chairman of Metro Vancouver’s agriculture committee. “This would particularly apply in Pitt Meadows, Maple Ridge, through the Fraser Valley and in Richmond as well. It has hit us in Richmond already.”

Neither the province’s July 2009 Farm Assessment Review Panel report nor Metro Vancouver’s review of that report specify the number of farms that will benefit from the changes, or the amount of property-tax revenue that municipal governments will lose as a result of the changes.

The B.C. Agriculture Council has argued that not all of a given farm property may be suited to agriculture — citing uneven land, riparian areas around streams and buffer zones between properties.

Bennett said farmers hit with higher residential tax rates for parts of their properties were increasingly looking to develop it for residential use.

“We want to make it easier for people to do small-scale agriculture, not harder,” Bennett said.

He added that the government’s review panel heard ” dozens and dozens” of stories from farmers who said it was difficult to stay in business and “one of the problems was the value of the property taxes they were charged.”