Farmland property is assessed on the basis of it productivity. The productive value of farmland is determined using a process that sets a value for the best soils, and then makes adjustments for less-than optimum conditions such as stones, the presence of sloughs, or topography not conductive to farming practices.
There are four factors that go into the value of farmland property:
Agricultural Land - Land that is used for farming operations.
Residences - The residence is assessed at its market value. The assessment of each residence located on farmland may be fully or partially exempt from property tax, depending on the total value of the land in a ratepayers farm unit. Farm Unit is made up all the farmland that the ratepayer may own.
Farm Buildings - A farm building is any improvement, other than a residence, that is used for farming operations. Farm buildings are exempt from assessment in rural municipalities. In urban municipalities, farm buildings are assessed and then exempted from property tax to a level of 50% from both municipal and provincial education tax.
Residential Site - The residential site is three acres of land surrounding the residence. These three acres are assessed using a market-value-based assessment, as if the three acre site was a separate parcel of land.