Classifying Land Used for a Retired Farmer’s Dwelling
Effective for the 2013 tax year, land used for a retired farmer’s dwelling may qualify for farm class. If the land is located in a rural taxation area, the dwelling itself may be exempt from general property taxes. A number of conditions must be met. Some of these conditions apply to the applicant; some apply to the land.
What are the conditions for the applicant?
The conditions for the applicant include the following:
• The applicant must be a retired farmer or the spouse of a retired farmer.
• A retired farmer is an individual who has retired from farming, but, for at least 20 years in total:
o occupied a farmer’s dwelling as his or principal residence on land owned by that individual or the individual’s spouse;
o was actively involved in the day-to-day activities on land classified as a farm that was part of the dwelling parcel or an adjacent parcel, and was owned by the individual or spouse.
• If the applicant is a spouse of a retired farmer, or was a spouse at the time of a retired farmer’s death, he or she must have been the spouse of the retired farmer when the retired farmer ceased farming.
• The applicant must own the land for which the application is made.
• The applicant must be at least 65 years old at the date of application.
• The applicant must own the dwelling on the land and occupy the dwelling as his or principal residence.
• The applicant must apply each year by October 31. This deadline is extended to March 15, 2013 for the 2013 tax year only.
What are the conditions for the land?
The conditions for the land include:
• The dwelling land must be in the agricultural land reserve (ALR).
• The dwelling must be the same dwelling that was occupied as a principal residence when the farmer retired.
• When the farmer retired from farming:
o the dwelling occupied as a principal residence must have been a farmer’s dwelling; and
o some portion of the dwelling parcel or an adjacent parcel must have also been classified as a farm.
• Part of the dwelling land or the adjacent parcel must be classified as a farm the next tax year (e.g., if the application is made October 31, 2013, some land must qualify for farm class for the 2014 tax year).
• The land that will be classified as a farm the next tax year must be owned by the applicant or his or her spouse.
These conditions are a summary of the statutory and regulatory requirements. Please refer to the Assessment Act and the Classification of Land as a Farm Regulation for more detail. Specifically, definitions for “retired farmer” and “spouse” are contained in the Assessment Act.
When is a retired farmer’s dwelling land ineligible for farm class?
Circumstances in which retired farmers’ dwelling land will not qualify for farm class include:
• The applicant is not yet age 65 at the time of application.
• The dwelling land is outside the agricultural land reserve (ALR).
• The dwelling land is not owned by the applicant.
• The dwelling land is solely owned by a corporation or partnership.
• The dwelling is not the applicant’s principal residence.
• The retired farmer does/did not have a minimum 20-year history of farm class of land owned and farmed by him or her.
• No portion of the dwelling parcel or an adjacent parcel will be in farm class the following tax year.
• The applicant is a spouse of a retired farmer, but was not the retired farmer’s spouse when the retired farmer ceased farming.
• The dwelling in respect of which the application is made is not the same dwelling owned and occupied when the retired farmer ceased farming.
When do I have to apply?
An application to have land used for a retired farmer’s dwelling classified as a farm must be made every year. For the 2013 tax year only, the application deadline is March 15, 2013. Only one application can be submitted by a retired farmer or spouse for retired farmer dwelling land.
For 2014 and subsequent tax years, the deadline will be October 31.
The Retired Farmer’s Dwelling Land Application is available here.
Will my dwelling qualify for a tax exemption?
If your dwelling is located in a rural taxation area and all the conditions are met to have your dwelling land classified as a farm, your dwelling will be exempt from general property tax, but it will still be taxable for school purposes.
Disclaimer: Where information presented differs from legislation, legislation shall prevail.