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Classifying Farm Land

Classifying Farm Land

& How to Apply for Farm Classification

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Section 23 of the Assessment Act and B.C. Reg. 411/95, the Classification of Land as a Farm Regulation (the “Farm Class Regulation”), set out the requirements that must be met for land to be classified as farm for assessment and tax purposes. Together, section 23 of the Assessment Act and the Farm Class Regulation will be referred to as “Farm Class Legislation”. 

Farm classification is a voluntary program. Owners of land who want all or part of it classified as farm must apply to the local assessor using the appropriate prescribed application forms – the General Application for Farm Classification or the Retired Farmer’s Dwelling Land Application. The Farm Class Regulation requires farm applications and any applicable lease to be submitted to BC Assessment by October 31 for the following taxation year. 

This page provides helpful resources to help you understand the classification of land as farm and the application process. 

In cases where BC Assessment’s interpretation differs from the legislation, the legislation prevails.  

Farm classification - FAQ

Over time, BC Assessment has collected information about each property in British Columbia from many sources, including: the province, your city, site visits, and even homeowners. 

The Classification of Land as a Farm Regulation, B.C. Reg. 411/95, made under the Assessment Act, provides that, upon application, the following land may qualify for farm class:

a) land used for a qualifying agricultural use;
b) land used for purposes that contribute to a qualifying agricultural use (e.g., irrigation, access to farm outbuildings, shelter belts);
c) land used for a farmer’s dwelling;
d) land in an agricultural land reserve (ALR) that is used for a retired farmer’s dwelling;
e) land used for the training and boarding of horses when operated in conjunction with horse rearing; and
f) in some cases, vacant land associated with a farm.

Other requirements will also apply.

All farm structures used in connection with the farm operation, including the farmer’s dwelling, will be classified as Class 1 - residential; however, farm buildings may have some degree of exemption from taxation.

BC Assessment must classify land as farm only if it is used for purposes that contribute to a qualifying agricultural use. 

Land that is used for a purpose other than farming will be classified according to that use. Land that has no present use and is located in the ALR may qualify for farm class if part of the parcel is farmed. 

If the land is not in the ALR, unused land may qualify for farm class if part of the property is farmed, the land is not zoned or held for business, commercial or industrial purposes, and:

  • it meets a prescribed highest and best use test;
  • at least 50% of the land outside the ALR is in production or contributes to production, provided the land is farmed by the owner; or
  • at least 25% of the land outside the ALR is in production, and the farm meets a higher income requirement, provided the land is farmed by the owner.

Farm Classification is a benefit which is intended to encourage the farming of land, and production of local food sources. The Classification of Land as a Farm Regulation sets out income thresholds, which are to be achieved in order to obtain farm classification. BC Assessment is required to confirm a farm continues to meet the income thresholds, to ensure a property should maintain its farm classification, and the associated benefits - such as regulated land rates, which result in lower assessed values on which property taxes are based.

"Farm gate amount" means the total of the following amounts received by a producer:

a)      the amount from a sale of a qualifying agricultural product

i)       in the case of a qualifying agricultural product other than a product referred to in subparagraphs (ii) to (iv), supported by

A)       written evidence of the sale price, or

B)       in the absence of written evidence, the sale prices of comparable products sold locally,

ii)      in the case of livestock that has been raised, supported by written evidence of any of the following, as applicable:

A)       the live weight price of the livestock, not including the slaughter and cut and wrap costs;

B)       the live weight price applied to the weight gained by the livestock while being raised on the producer's farm operation;

C)       the difference between the purchase and sale prices of the livestock,

iii)     in the case of a horticultural crop that is purchased and transplanted or moved to the producer's farm operation for further growth, and is subsequently sold, supported by written evidence of the difference between the purchase and sale prices of the crop, or;

iv)     in the case of a breeding product, supported by written evidence of the sale price;

b)      in the case of a qualifying agricultural product, other than a breeding product, that, because of loss or damage to the product, is not sold, the amount of any indemnity payment, supported by written evidence of the payment;

c)      the amount of the fee for a horse stud service provided, supported by written evidence of the fee paid;

In the absence of receipts, BC Assessment staff may rely on local market prices or other local sources. You may be required to provide a sales log or other proof of farm sales.

We recommend that you keep receipts, sales logs or other proof of farm income for at least a three-year period.

BC Assessment will remove the property from farm classification, and apply the appropriate classification according to the Prescribed Classes of Property & Classification Regulation. The land valuation will change when it is removed from farm classification.

Yes. If you re-apply for farm classification and meet the prescribed requirements, your property can qualify for farm class.

Property already classified as farm land must continue to meet the requirements to receive farm class for the following year. BC Assessment may ask you to provide additional information in support of continued farm classification. Failure to provide the required information about your farm operation will result in the removal of farm classification from your property.

After you purchase a property that is classified as farm and if you plan to continue farming the property, you are required to submit a General Application for Farm Classification to BC Assessment by October 31. If you are not planning to continue to farm the property, please contact BC Assessment and notify the staff of your plans to cease agricultural activity.

Apply for farm classification

The deadline to submit your farm application to BC Assessment is October 31

Before submitting your application for farm classification ensure you have reviewed the following:

  • the requirements for farm classification and your land meets the requirements
  • the income thresholds
  • the guide on a General Application for Farm Classification "> General Application for Farm Classification
  • please ensure you:

    - include proof of sales such as a copy of receipts, sales logs, invoices for processing costs (i.e. slaughter, etc.) or other information supporting the income claimed (Item #7 of your application)

    - complete all required Date fields and your estimated sale prices for your products if applying as a Developing Farm (Item #8)

    - your Farm Site Plan (Item #10 on the General Application for Farm Classification). (This can either be a rough sketch outlining buildings, driveways, area planted, pasture, etc. OR an aerial photo of the property.)

    - your signature, date, contact information such as email and telephone number(s) (Item #12)

    - complete all areas of the relevant application forms and ensure all forms are signed by both parties if leasing your property to another farmer (Item #13).

To have land classified as a farm the next taxation year, the owner must submit a General Application for Farm Classification. For assistance completing the Application form, use our “How to” guide for step by step instructions.

The deadline to submit your application form to BC Assessment is October 31. Submissions can be done via email, fax or in person.

Important note: General application is not required every year, but BC Assessment periodically requires information to support continued farm classification, such as farm income or lease information.

To have land classified as farm for a retired farmer's dwelling, the owner must submit a Retired Farmer’s Dwelling Land Application. If you are a retired farmer, please visit Classifying land used for a retired farmer's dwelling for more information. 

The deadline to submit your application form to BC Assessment is October 31. Submissions can be done via email, fax or in person.

Important note: An application to have land used for a retired farmer’s dwelling classified as a farm must be made every year.

Land that is leased to a farmer may qualify for farm class if:

  • the owner applies to have land classified as a farm;
  • the owner and lessee enter into a lease;
  • the leased land makes a reasonable contribution to the farm operation; and
  • the lessee – farmer meets the income and sales requirements.

The lease document is to be filled in conjunction with the General Application for Farm Classification and should only be used to renew or replace an existing lease agreement. Sections 1-6, 12 and 13 in the General Application for Farm Classification need to be completed when applying with a lease agreement.

For more information, please visit Classifying Land Leased to Farmers.

Exemptions

In municipalities, the tax exemption for farm buildings other than farmer's dwellings, is $50,000 or 87.5% of the total assessed value of farm buildings, whichever is greater.

This exemption also applies for school tax purposes.
All farm buildings in a rural taxation area, including farmer's dwellings, will be entirely exempt from general provincial tax. Farmer's dwellings will remain taxable for school purposes, but the school tax exemption for farm buildings other than farmer's dwellings will be capped at the greater of $50,000 or 87.5% of the buildings assessed value.

For example, in a municipality, farm buildings assessed at $500,000 will only be taxed on $62,500. A farmer’s dwelling in a municipality is fully taxable.
In a rural taxation area, farm buildings assessed at $100,000 will only be taxed for school purposes on $12,500. A farmer’s dwelling in a rural taxation area will be fully taxable for school purposes.




Updated 06/2021

Disclaimer: Where information presented is different from legislation, legislation shall prevail.



  
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Classifying Land Leased to Farmers
Classifying Land Used for a Retired Farmer's Dwelling
Farm Classification in British Columbia
Farm land assessment
Farm Property Inspections

 Contact a farm team member

Farm applications are processed by regional departments.
 
Kootenay Columbia Region:
​Vancouver Island Region:
farmvanisl@bcassessment.ca
Thompson Okanagan Region:
thompson.okanagan@bcassessment.ca
Northern BC Region:
northern.bc@bcassessment.ca