This information is provided for general information and should not be relied upon as advice from the Board or indication of how the Board would make a determination in any particular appeal.  You can link to specific legislation and previous Board decisions by clicking on blue colored text.

What is farm class?

All properties in British Columbia are classified based on land use and the requirements outlined in the Prescribed Classes of Property Regulation. There are nine separate property classifications including Class 9 (“Farm”).

Farm classification is usually beneficial for property owners because farm land is typically taxed at a favourable rate and farm land assessment values are usually significantly less than fair market value.  Also, “land classified by the Assessor as a farm must…be valued at its actual value as a farm, without regard to its value for other purposes”, such as redevelopment (section 23(4) of the Assessment Act).

How is farm class determined?

Land is classified as a farm only if it meets the requirements of the Standards for the Classification of Land as a Farm Regulation.  Even though property may be zoned as agricultural land, or in the provincial Agricultural Land Reserve, farm classification will only be granted if the land (or at least a portion of it) is being actively used for primary agricultural production and it meets the other requirements of the Regulation.  See Board decision Pugh et. al v. Area 01.

Only land can be classified as farm land (section 23, Assessment Act).  Farm buildings (residences and outbuildings) are classified separately, typically as residential - Class 1, and are valued at fair market value (section 23(5) of the Assessment Act).

What if only part of the property is farmed?

A single property may be given a “split classification” where it is divided into two or more separate classifications (see section 10 of Prescribed Classes of Property Regulation and Pugh et. al v. Area 01). 

Split classifications must be “equitable”.  Similar farm properties in the same area should be treated equally in terms of the relative proportions of the land that are split between farm and residential classifications (see Denford v. Area 01).

How do you qualify for farm class?

Generally, the requirements of the Farm Classification Regulation are:

1.      Usage:  The land must:

• be used for “primary agricultural production”;
• be the site of “a farmer’s dwelling”;
• be used for training and boarding horses in a horse rearing operation; or
• otherwise contribute to primary agricultural production such as land used for drainage, irrigation, buffers and windbreaks (section 4(2.1) of the Farm Classification Regulation).

Only certain types of agricultural production qualify for farm class such as apiculture, horse rearing, horticulture, livestock rearing, fruit and vegetable production.  A full list is in Schedule A of the Farm Classification Regulation.  Agricultural production for purely domestic consumption on the farm and the breeding and raising of pets, other than horses, do not qualify.

2.      Exceptions to usage requirements: In the following circumstances, land that is not being used for primary agricultural production may be classified as farm land:

• land that contributes to primary agricultural production for purposes specified in section 4(2.1) of the Farm Classification Regulation (e.g., drainage, windbreak or a buffer);
• Agricultural Land Reserve (ALR) land that is ancillary to a farmer’s dwelling, or has no present use and is not held for some other business, commercial or industrial purpose or (see section 4(3));
• land outside the ALR that meets one of the criteria outlined in Section 4(3.1).

3.      Annual value of primary agricultural products: A certain minimum amount of income (called gross annual value) must be produced from the primary agricultural production (section 5 of the Farm Classification Regulation). See Backman v. Area. 20.

The minimum income requirements vary depending on the total land area.  The farmer is required to show a gross annual value of the product sold within either the 12 month period ending October 31 or the preceding 12 month period.  For example, a minimum annual value of $2,500 is required for land between 8000 m² and 4 ha and $10,000 if the total land area is less than 8000 m².

The farm will meet the gross annual value requirement if the minimum level is achieved every other year.  However, according to section 5(3) there must have been a sale of primary agricultural products during each year.

4.      Exception of requirements for sale:  Section 6 allows for exceptions to the above sales of primary agricultural products but it only applies to specific listed products (e.g. grains).  The products must have been produced in sufficient quantities to have met the minimum value (if it had been offered for sale) and be available for sale within 12 months after October 31. 

The Farm Application Process

Farms do not automatically qualify for farm class.  You must apply to BC Assessment to receive farm classification using their Application form.

The application must be delivered to BC Assessment no later than October 31 of the year preceding the assessment (e.g. by October 31, 2010 for the 2011 assessment).  This deadline is mandatory and cannot be waived by BC Assessment, the Property Assessment Review Panel or the Property Assessment Appeal Board (see Faouaz-Lees v. Area 19).

Once farm class is granted a new application is not required each subsequent year.  A new owner of a farm property may be required to submit a farm class application by October 31 even though the property was previously classified as a farm (see section 3(2) of the Farm Classification Regulation).

How to apply as a developing farm?

An application for a “developing farm” must be filed by October 31 using BC Assessment’s Application form (see section 8 of the Farm Classification Regulation).

BC Assessment must be satisfied that certain conditions will be met:

• land must have been prepared and planted by October 31 of the year preceding the assessment (e.g. by October 31, 2010 for the 2011 assessment) – see Nicholls v. Area 15.
  Note:   the crop can be planted by the following spring, if it is demonstrated that the farm will be “viable” (see section 8(3);
• livestock or poultry must have been purchased and on the farm site;
• the other requirements of the Regulation, such as applicable gross annual value will likely be met within the normal crop cycle.

If an applicant fails to follow their development plan BC Assessment can declassify the land from farm class (see Gill v. Area 15).

What if the owner leases the land for farming?

The requirements are outlined in section 7(1) of the Farm Class Regulation. A copy of a valid and current lease document must be submitted to BC Assessment by October 31st of the previous year. 

The written lease must include:

• the names and signatures of the lessee and the lessor,
• the legal or other well defined description of the land being leased,
• the commencement date,
• the signing date,
• the duration of the lease,
• the lease area and the intended use of the leased land and,
• the “consideration” (the payments or benefits provided by lessee to the lessor).
  See Falkenberg v. Area 17.  BC Assessment has prepared a sample lease form that may be used.

The leased land must:

• “make a reasonable contribution to the overall farm operation” (see Mueller v. Area 11), and
• be 8000 m² or greater (except if the farm is in the ALR and used for primary agricultural production).

In order to avoid losing farm class, property owners should ensure that a new lease is entered into and provided to BC Assessment, before or immediately after the former lease expires.

What if BC Assessment sends a request for information?

Either before or after you receive your assessment, BC Assessment may require an owner or lessee to provide certain information, such as farm product sales receipts or details of any farm lease.  This is to ensure that the land still qualifies for farm status (see section 10). 

However, the request for information must meet certain minimum requirements so that the person can adequately respond, such as:

• be clear as to what is being requested,
• be for information BC Assessment is entitled to,
• provide a reason for the request,
• set out the consequence for not providing the information, and
• be clear as to the time the owner has to comply (and provide the owner at least 21 days from the date of receipt of the request).
  See Van Kerkoerle v. Area 04. 

The owner or lessee must provide the requested information by the stated deadline otherwise the land may be declassified (see Shoaf v. Area 27).

What happens if the property does not meet the requirements in the Regulation?

It is often difficult for owners that are legitimately farming to understand that they may lose farm class simply because they do not meet one of the requirements of the Farm Classification Regulation.

Land may be declassified in a variety of circumstances such as when new owner fails to submit a farm application as requested by BC Assessment, the farm fails to achieve the applicable gross annual value, the owner fails to provide information that has been requested by BC Assessment, the owner fails to follow an approved “developing farm plan” for their land or a valid lease is not submitted.

Other Links:

BC Assessment has prepared the following information dealing with farm classification:

• Classifying Farm Land
• Classifying Land Leased to Farmers
• Classifying Horse Operations for Farm Assessment
• Farm Property Inspections
• Farm Classification in British Columbia brochure
  

Note: BC Assessment is a separate and independent body from the Property Assessment Appeal Board and the Appeal Board does not guarantee the in any way the content of their materials.