Farm land assessments are regulated by the Municipal Government Act and are completed annually using the valuation date of July 1 of the previous year. The valuation standard for farm land assessments is agricultural use value. Land that has qualified for farm status will be assessed at a regulated rate and will not be assessed at market value.
What qualifies land for farm status?
Under Alberta Regulation 220/2004 (Matters Relating to Assessment and Taxation Regulation) of the Municipal Government Act, a "farming operation” means the raising, production and sale of agricultural products and includes:
- horticulture, aviculture, apiculture and aquaculture.
- the production of horses, cattle, bison, sheep, swine, goats, fur bearing animals raised in captivity, domestic cervids within the meaning of the Livestock Industry Diversification Act and domestic camelids.
- the planting, growing and sale of sod.
How do I apply for farm land status?
Land previously assessed as farm land will receive an Assessment Request for Information (ARFI) for farm land properties each year. This ARFI must be completed and returned within the specified time frame. Land not previously assessed as farm land may qualify as farm land for the next taxation year if the owner completes an ARFI. ARFIs are available by contacting Assessment.
Submission of an ARFI does not guarantee farm land status.
For more information regarding the Farm Land Rating System, please view the Regulated Assessment Model Overview.
Farm Status Regulated Rates
For valuation date July 1, 2016, the regulated rates ($) are:
- arable dry land 350
- arable irrigation 450
- pasture 350
- woodlot 135
Note: rates are based on a maximum rate per acre.
For valuation date July 1, 2016, the base year modifiers for farm regulated properties are:
- dry arable 1.00
- dry pasture 1.00
- irrigated arable 1.03
- woodlot 1.00
Valuation examples of farm land rates
Land Valuation Example
Farm land is assessed using a regulated rate and the value has no reflection on the market value of the parcel.
*The following ratings are for example purposes only.
Vacant farm land parcel calculation
For a 160-acre parcel with no buildings or non-farm use:
- assessment/acre = rating x base rate/acre
- $245/acre =70 per cent x $350
- 160 acres = 160 x $245/acre = $39,200 assessment
Vacant farm land parcel that includes a market value component
Farm land parcel assessment can include a market value component when the following conditions exist (please note this is not a comprehensive list):
- Three acre site for residential purposes.
- Three acre site where water and sewer are adjacent to a parcel. Note, water and sewer lines are not required to be in use by the adjacent farm parcel for the adjacent farm parcel to be assessed for it.
- assessment/acre = rating x base rate /acre
- $245/acre =70 per cent x $350
- market value rate: $150,000/acre
Total assessment = farmland vacant plus market value land = $488,465
The assessment would be:
- 157 acres x 245 = $38,465
- 3 acres x 150,000/acre = $450,000
Total assessment = farmland vacant plus market value land = $488,465.
For more information about the legislations referring to farm land, please review MRAT 220/2004.
Improved farm parcel farm land assessment
The value of the land would be calculated as above with the addition of improvement value. The MRAT 220/2004 allows for a three acre site value to be assessed for residential improvements.
Farm buildings are exempt from assessment in rural municipalities. In Calgary, this applies to annexation properties with board orders that regulate rural assessment.
Farm buildings are exempted from tax to a level of 50 per cent of assessment in urban municipalities.
Farm residences are assessed whether they are occupied or not. The valuation standard is market value.
The valuation method used is the cost approach. The value of the property is adjusted based on the positive or negative attributes of the site.
Farm land Residential Exemptions
In the city of Calgary, farmland residential exemptions apply:
- To farm land residences on farm land which have an assessment that is regulated by an annexation order; and
- The annexation order must specify assessed in a rural municipality; and
- The annexation order specifies the farmland residential exemption status.
Farm land residences can be exempted by the assessment on the farm and included in the owners unit. The exemption amount is based on the regulated farm land assessment that is linked to the residential component. There is a provincially regulated exemption maximum of $61,540 for the first residence and $30,770 for additional residences.