MPACDOWNLOADS
Click here to download the MPAC update from the July issue of WHOA!
Click here to download the May 9, 2005 Update (pdf file - Acrobat Reader)
Click here to download the March 14, 2005 Annoucement (pdf file - Acrobat Reader)
Click here to download the MPAC - Assessment of Equestrian Properties Questions & Answers (pdf file - Acrobat Reader)
Click here to download an example of an assessment of a Horse Establishment (pdf file - Acrobat Reader)
Click here to download the February 25, 2005 Update (Word)
Click here to download the February 13, 2005 Update (Word Document)
Click here to download the January 27, 2005 UPDATE (pdf file - Acrobat Reader)
Click here to download the campaign letters (pdf file - Acrobat Reader)
Click here to download the 1 page summary - post & pass on (pdf file - Acrobat Reader)
Click here to download the Update - Detailed Summary January 23, 2005 (pdf file - Acrobat Reader)
YOU CAN SAVE $$$$$$
Why pay more in property tax than is necessary? WHOA!-July 2005
If you are a horse farm owner who has not sought a re-assessment of your property since the Ministry of Finance approved regulatory changes to property assessments in March 2005, don’t delay in contacting the Municipal Property Assessment Corporation (MPAC) tollfree at 1-866-296-6722. And we don’t mean just those members who were recently assessed at the commercial rate …
The Ontario Equestrian Federation went to bat for its members and lobbied the Ministry and MPAC over the winter when it became evident that horse farms were being evaluated at a commercial rate that resulted in tax increases of up to 1900% for some!
After educating MPAC officials as to the activities conducted by horse farm owners, an MPAC report to the Minister of Finance was able to recommend that most activities would fall into either the ‘farm’ or ‘residential’ class, and that the ‘commercial’ rate should be applied only to those activities that are truly commercial in nature (e.g. tack shop, restaurant, or farrier that provides products and/or services for sale).
Previously, the maintenance of horses fell into a gray area within the legislation. The OEF obtained support from the Ontario Federation of Agriculture (OFA) and the Ontario Ministry of Agriculture and Food (OMAF) to consider horses as livestock. That made it easier to work towards a resolve of the tax situation, as the Ministry was able to accept that horse maintenance included breeding, training, boarding, raising and maintaining horses.
Members who have been previously assessed as commercial, whether recently or long-term, need to reverse that situation. It will not be done automatically. You must contact MPAC to arrange for a re-assessment. Going forward, there should no longer be any Ontario horse farm that has even a small portion of the property considered commercial if they are offering nothing more than breeding, boarding, training, riding lessons, and/or trail rides.
Worse-case scenario is that a property would be assessed totally as residential. More likely, properties will be a mix of residential and farm. That’s a big difference in your taxes, when the commercial rate is approximately 4%, residential is approximately 1.5%, and farm is 25% of the residential rate!
Farms generating more than $7000 in revenue from the breeding, training, raising, or maintenance of horses are eligible to apply to the Ontario Ministry of Agriculture for a ‘farm property rate’. This will immediately provide you with a 50% obsolescence reduction in the value of your property and allow it to be taxed at the much lower farm rate. Many OEF members need to determine if they qualify for the farm property rate.
There’s no need to be spending more than you have to!
Call these numbers today …
MPAC 1-866-296-6722
OMAF 1-888-466-2372
Significant Tax Savings being Missed on Horse Farms
Update May 9th, 2005
Horse farm property owners (and their accountants) need to understand that many owners will be able to lower their property taxes even if they were not previously assessed in the commercial tax class. It is important to call the Municipal Property Assessment Corporation (MPAC) and have your assessments corrected ASAP - by May 20th , if at all possible! It will be more difficult after this date. Call MPAC, not your municipality. The changes are retroactive to Jan 1, 2004. To date, only 60 properties have called and have been corrected.
One of the biggest wins in this taxation fight was for horses to be recognised as livestock and that raising, maintaining and caring for all horses - not just breeding stock or racehorses, is now being treated consistently with other types of farm activities. These are the new rules since March 2005 and retroactive to Jan 1, 2004. It does not matter if you train, teach lessons, board horses or give trail rides. It would be wise for everyone to verify that their properties are being treated as farms for 'valuation' purposes. You will pay a residential tax rate or if you qualify, you will pay a farm tax rate. The valuation determines the dollars on which you will pay the tax rate. Many properties will have their valuations lowered by as much as 50%!
Assuming you are not a hobby farmer and you are maintaining and caring for horses, then your property will be assessed as a farm. This means the valuation on the barn and arena, will be treated as farm buildings. There is 50% obsolescence on your barn and arena. Many horse farms do not have this today. If your barn and arena is valued at $300,000, for example, then it will automatically be assessed as a farm building and re-valued to $150,000 by MPAC. This alone will lower your property taxes. Your land will also be valued as farmland. The residential tax rate will apply (not commercial) unless you qualify for the farm tax rate (25% of the residential rate). The obsolescence is to recognize that you typically do not get full value for farm buildings on the sale of a farm property.
If you are a horse farmer running a horse business and living in your house on the property then the 1 acre around your house will be considered a farm acre and valued at $3500 (example only - exact values vary), instead of a residential acre possibly valued at $75,000. Again this will lower your taxes! Your house and the 1 acre around your house will be at a residential tax rate regardless whether you qualify for the farm tax rate or not.
The area used exclusively for trail rides or lessons will be taxed at a residential tax rate or there will be a portion that is at the residential tax rate and the rest at the farm tax rate. For example, most likely your arena is used for pleasure riding, training and caring for horses and it is also used for lessons. If an arena is open for use 10 hours a day and an average of 2 hours per day is for lessons, then 20% of the value should be at a residential tax rate and 80% of the value will be at the farm tax rate, assuming you qualify. Otherwise, it is 100% at the residential tax rate - never commercial. If there is a tack shop or restaurant - this area only would be valued at full value and taxed as commercial.
It is definitely to your advantage to call MPAC and check on the valuation of your property and make sure you are getting the best valuation and tax rate possible. See the OEF website www.horse.on.ca for the latest information, MPAC's Q & A's, and an example. The MPAC number to call is 1-866 296-MPAC (6722) select either English or French for your language of preference, then press 4 to speak with an agent who is trained to handle equestrian centres. Call before May 20th , 2005 if at all possible. To confirm your eligibility for the farm property tax rate contact OMAF at 1-800-469-2285 or www.gov.on.ca/OMAF.
COMMERCIAL TAX ELIMINATED FOR HORSE FARMS!
March 14, 2005
On Friday, March 11, 2005, Minister of Finance, Greg Sorbara, formally announced his decision to direct the Municipal Property Assessment Corporation (MPAC) to adopt and implement the recommendations put forward in their report on appropriate criteria for assessing equestrian facilities. March 14 saw the Ministry of Finance pass O.Reg. 100/05 that amends the property classification regulation (O.Reg 282/98) to change the way equestrian operations are assessed and classified. The regulation comes into effect for the 2004 and subsequent taxation years.
"The new criteria for assessing horse farms represents an appropriate balance between fair treatment for horse farm owners and consistency with other types of properties," said Greg Sorbara, Minister of Finance. "We remain committed to continuing to work with MPAC to find further ways to improve the quality and consistency of property assessments in Ontario."
On August 18, 2004, the Association of Riding Establishments of Ontario (ARE-ONT), in partnership with the Ontario Equestrian Federation (OEF), formed a Committee to address the property tax issues surrounding horse farms and riding establishments.
Since August, volunteer co-chairs of the Committee, Jim Waechter and Leslie Brooks, diligently researched and organized the steps needed to make the necessary changes to ensure fair and equitable property assessment of equestrian facilities. In addition to meeting with politicians, agricultural groups and members of MPAC, itself, Jim and Leslie spearheaded a letter writing campaign in order to draw attention to the disastrous consequences of the recent property assessments by MPAC on equine establishments. Working closely with Marcia Barrett and Al Patterson of the OEF, the Committee strived to have a single strategy in order to implement the changes that were required.
In response to the letter writing campaign, Sorbara had asked MPAC in early February to meet with representatives from equestrian associations to develop the appropriate criteria. The Ontario Equestrian Federation and the Association of Riding Establishments of Ontario, the Ministry of Agriculture and Food, MPAC and the Ministry of Finance participated in the discussions. The Ontario Federation of Agriculture and the Christian Farmers Federation of Ontario were also consulted to provide insight into the views of the farm community on this issue.
During the discussions, the OEF made it clear that any resolution to this issue must not impair the horse industry’s economic viability as well as provide consistent taxation treatment across the horse-racing and equestrian industries.
To this end, MPAC recommended to Sorbara that:
(1) only activities that occur on equestrian facilities that are commercial in nature be treated as commercial property (tack shops, premises used to sell equestrian supplies or clothing; restaurants; snack bars; cafeterias; commercial race tracks and slots; grandstands; banquet halls; and areas used to provide blacksmith, farrier or other retail services to the public)
(2) activities that are agricultural in nature be assessed at their current use value and classified as residential or as farm. These uses include: maintaining, raising and selling horses; breeding horses; boarding horses; and training horses, excluding the training that naturally occurs during riding lessons offered to the public. Under this regulation, the boarding of horses, regardless of who owns the horses, now qualifies for the farm valuation treatment. The classification of the property will depend on whether the owner qualifies for the farm tax rate. If the owner qualifies, the property will be classified as farm. If the owner does not qualify, the property will be classified as residential. It is important to note, however, that these activities are not considered to be farm activities when they are conducted for recreational or hobby purposes.
(3) some activities be considered as rural recreational in nature, similar to other land intensive, rural recreational activities, such as golf courses and ski hills. Where land is used exclusively to provide riding lessons, trail rides, or riding camps to the public and not in conjunction with any other farming activities; bunkhouses or camping facilities; or where horses are kept for recreational or hobby purposes; would be classified in the residential tax class.
The revised assessment criteria will be retroactive to January 1, 2004.
This announcement comes as a huge relief to the many horse farm owners who have been reassessed at a commercial property tax rate by MPAC as well as the thousands of others who have yet to be reassessed.
The implications of the commercial tax rate upon horse farms were becoming disastrous, as many farms found themselves downsizing and even closing doors. The effects were also being felt by those in the greater agricultural community who were not specifically horse owners (for example, hay and feed suppliers, tack shops, farrier and other horse health practitioners, and pharmaceutical firms to name a few).
The OEF and ARE-ONT are both extremely pleased with the Minister’s ruling. “The OEF, along with volunteers Leslie Brooks and Jim Waechter, have devoted a lot of time and effort towards this issue. We are delighted to see that equestrian facilities will now be assessed in a fair and equitable manner,” stated OEF President, Allan Ehrlick.
"This is good news for equestrian farm owners, not only because the new assessment criteria will be more equitable for all concerned but because it recognizes the different land uses within our sector," said Marcia Barrett, Executive Director of the OEF. "We also appreciate being involved in the quick and effective consultations that led up to this decision."
"Ontario farmers provide unique and valuable services that contribute to our quality of life and we must be sensitive to their requirements," said Steve Peters, Minister of Agriculture and Food. "It is important that we recognize the different types of activities which are part of our agricultural community and treat them fairly."
The horse community as well as the OEF membership are relieved and grateful for the efforts taken on their behalf by the OEF and ARE-ONT. “Our congratulations and sincere thanks to the OEF and all the people who worked so unbelievably hard to get this accomplished. We're proud to be members of the OEF.” “This is wonderful news! Thanks for your efforts!” ”Congratulations on a job well done.” “I just wanted to thank you, on behalf of myself and my friends who are all recreational riders, for your efforts with respect to the recent MPAC/Ministry of Finance decision. It couldn't be more clear to me that my membership dues are really paying off!”
There may be some unique circumstances and minor details that still need to be discussed, but the OEF and MPAC have agreed that they would continue to work together to resolve any issues that may arise.
Horse farm property owners who believe their current assessments are not correct or have been assessed as commercial or partially commercial should phone MPAC at 1-866-296-MPAC (6722) and they will be prompted to be directed to specifically trained call centre staff who are ready to initiate the process to have their tax assessments corrected and revised back to Jan 1, 2004.
The OEF has taken further steps to seek retroactivity prior to 2004 in an effort to ease the financial burden on horse farm owners assessed before that date, and has asked Minister Sorbara to reconsider his directive.
Any further updates will be posted on the OEF website: www.horse.on.ca
HUGE NEWS
Friday, Feb 25 - there was an information session at King City Town offices. About 30 people were in attendance. There were 3 Mayors, Carl Isenburg - President of MPAC, horse people, a reporter and other friends. Carl and Leslie Brooks gave background information, along with the current status. Then there were questions and answers and a lot of lively discussion and many opinions!
Leslie will be attending another MPAC information session on Wed., Mar. 2nd, 1-4 at the former York Equestrian Centre - now the Royal Canadian Riding Academy. North York Farmers feed store arranged this over the last couple of weeks. Rose McLean from MPAC will be also be attending. There will be a Q&A session at the end of presentations. The MPAC discussion will start at 2. From 1-2pm Robert Wright of the Ontario Ministry of Agriculture and Food will be speaking on 'Horse News and Views - Research and recent events that impact on the Canadian horse industry'. Address: 4252 Davis Dr., Newmarket - Call Vicky at 905-895-5172 to reserve your seat.
Please let Leslie know if you know of any public meetings or ask them to contact her - 519-696-3688 JLnet@Quixnet.net . We would like to give organisers information or attend and speak to the issues and status. We need to be delivering the correct information and we do not want to send the wrong message to media, horse people or to government. Many people have no idea how far we have come already in fighting the commercial taxation of horse farms. They need to be brought up to date. We also need to be consistent in our approach and handling. At this point, we do not want to be to aggressive. (No protests please!) We are getting nothing but co-operation and speedy dealings from all areas of government including MPAC. We understand that it probably does not feel that way to many of us who have been reassessed but we have been assured by many that should know, that this is lightning speed for government and this type of issue.
On Feb 3rd Greg Sorbara, Minister of Finance, asked MPAC to stop reassessing all horse establishments and to work with us to develop appropriate property taxation criteria. MPAC is to deliver a report back to him within 30 days. Over the last 2 weeks, we have had many meetings and they were very productive. MPAC is now drafting a report with the recommendations. We will be reviewing the report and then it will go to the Minister of Finance by the end of this week. We then expect to hear from the Minister within a fairly short period of time. If he accepts the recommendations we have been told that he could tell MPAC to apply them immediately - legislative change would not be required and there should be no additional delays. We will also be asking for corrections to those reassessed inappropriately to be made for the last few years.
In attendance at these meetings - MPAC, Ministry of Finance staff, OMAF, OFA, Christian Farmers, OEF/ARE, Leslie Brooks and Jim Waechter (the volunteer Co-Chairs of the OEF/ARE MPAC Committee). We are not at liberty to reveal any of the recommendations but I (Leslie) can tell you the meetings have been very productive and I am pleased with our discussions and recommendations. At this point, we need the report to go to Greg Sorbara later this week (by March 4th)and then we need to wait for his response.
It is also great to know that the Greater Toronto Area Mayors passed a motion Feb 22nd in support of asking Minister Greg Sorbara to require MPAC to return assessment to 2003 valuations where value added has been reassessed.During this process, please see www.horse.on.ca for updates and continue the letter writing campaign. (MPAC has received about 2000 letters!)Leslie Brooks & Jim WaechterVolunteer Co-Chairs of the OEF/ARE MPAC Committee519-696-3688 (Please call us if you have reassessed as commercial or you are concerned)
DOWNLOADS
Click here to download the MPAC update from the July issue of WHOA!
Click here to download the May 9, 2005 Update (pdf file - Acrobat Reader)
Click here to download the March 11, 2005 Annoucement (pdf file - Acrobat Reader)
Click here to download the MPAC - Assessment of Equestrian Properties Questions & Answers (pdf file - Acrobat Reader)
Click here to download an example of an assessment of a Horse Establishment (pdf file - Acrobat Reader)
Click here to download the February 25, 2005 Update (Word)
Click here to download the February 13, 2005 Update (Word Document)
Click here to download the January 27, 2005 UPDATE (pdf file - Acrobat Reader)
Click here to download the campaign letters (pdf file - Acrobat Reader)
Click here to download the 1 page summary - post & pass on (pdf file - Acrobat Reader)
Click here to download the Update - Detailed Summary January 23, 2005 (pdf file - Acrobat Reader)
Update: Feb 13, 2005
Great news! The Minister of Finance, Greg Sorbara, issued a News Release Feb. 3, 2005.
'Pending the outcome of the review, the Minister of Finance has requested that MPAC not make any further changes to the classification of equestrian facilities.' This is a big step in the right direction. We are optimistic but there is still a lot of work to do.
The first meeting ‘to develop appropriate criteria for assessing equestrian facilities’ is Monday Feb 14th. Finance has arranged a meeting with OMAF, MPAC, the chairs of the ARE MPAC Committee and an OEF Executive Director. We have had many advisors throughout this process and we are well prepared to present the issues and recommendations. Thanks to everyone for their input. Greg Sorbara wants a report within 30 days! (By Mar.3).
The Chairs of the ARE MPAC Committee are also meeting with the OFA’s Farm Finance, Trade and Taxation Standing Committee on Tuesday, Feb 15th.
Toronto CTV news is covering this on Monday, Feb 14th at 6PM. The Toronto Sunday Sun had a large article Feb 6th and the Toronto Star is delayed (on vacation - maybe March!).
WHAT YOU CAN DO TO HELP:
Keep the letter writing campaign going. You can add your own personal notes to the letters!
Contact your town councilors and MPP’s to help them understand the issues and how devastating this will be if not turned around. Help people understand that horses are livestock, the ‘large’ buildings and land we need to house them, the farming activities that we do in caring for them, the large amounts of hay, grain and bedding we use, etc, etc. The activities and expenses are very similar to that of other farmers – whether they have beef, hogs or sheep. Livestock identification, Nutrient management and Greenbelt issues affect all of us. We are the same as racehorse maintenance and racehorse maintenance is assessed as farming! Our businesses are agricultural in nature – we should be assessed as such for property taxes. When running a horse farm business, of course we will pay ‘income tax’ as any business or farmer will. Lessons, boarding, trail rides and camps are value-added activities for the farm. Today breeding, raising livestock, training, showing are considered farming. If you would like a written summary of issues and recommendations, contact us – JLnet@Quixnet.net .
There is a ROMA (Rural Ontario Municipalities Association) conference Feb 20-22. It would be helpful for the Mayors, councilors and MPP’s to understand the issues before this.
PLEASE keep informing horse owners, barn owners, riders, friends, news media and service providers of the situation and direct them to the updates and the letter writing campaign at the OEF site www.horse.on.ca . There is a detailed summary on the OEF site that could be very helpful for barn owners needing more information. You may call us or the OEF Office if you have questions. Leslie Brooks and Jim Waechter 519-696-3688.
We need to hear from anyone who has been assessed as commercial (I heard from 1 large facility that was assessed as industrial). We need to understand as many situations throughout the province as possible. Assessments are very inconsistent. Thanks for your help!
Remember – for updates and the letter writing campaign – see OEF site www.horse.on.ca
MINISTER OF FINANCE RESPONDS
Late afternoon on Thursday, February 3rd, 2005, the Ministry of Finance formally directed the Municipal Property Assessment Corporation (MPAC) to review the criteria for the property tax classification of equestrian facilities. This comes as a great relief to the many horse farm owners who have been reassessed by MPAC as well as the thousands of others who have yet to be reassessed.
Over the past few years, MPAC has initiated an aggressive program of reassessing of equestrian facilities across the province. They began to apply a little used legislative provision to reassess the property tax classification for boarding and lesson stables as Commercial instead of Rural Residential or Farm. A commercial classification means the property assessment could go from a farmland (0.3%) tax rate to a commercial (4%) tax rate. This could mean an increase of as much as 2600% depending on tax rates in each municipality. In dollars, that translates to tax bills going up by $10,000, $15,000, $20,000 or more.
"I have asked MPAC to meet with representatives from equestrian associations to develop appropriate criteria for assessing equestrian facilities," Finance Minister Greg Sorbara said. "I expect to see a report about these criteria within the next month." Pending the outcome of the review, the Minister of Finance has also requested that MPAC not make any further changes to the classification of equestrian facilities.
The Ontario Equestrian Federation (OEF) and the Association of Riding Establishments of Ontario (ARE-ONT) are both extremely pleased at the speedy response from the Ministry of Finance. The two organizations have been working closely together over the past number of months to address the property tax issues surrounding horse farms and riding establishments.
The action taken by the Ministry of Finance is a result of a meeting with Ministry of Finance Representative, Nancy Naylor on Wednesday Jan 26th as well as an aggressive letter writing campaign, which has been in place since late November. Naylor, the Assistant Deputy Minister and the Director, Property Tax Policy Branch, met with OEF Executive Director, Marcia Barrett, OEF Past President, Al Patterson, and ARE-ONT/OEF MPAC Committee Chair, Leslie Brooks.
“We, at the OEF, have put a lot of energy and effort towards what we feel has been an inequitable taxation increase on FARMS and while the task is far from over, it is encouraging that the Government is listening,” stated OEF President, Allan Ehrlick.
The OEF and ARE-ONT are looking forward to sitting down with MPAC in the very near future to ensure that appropriate criteria for assessing all equestrian facilities are developed.
Minister of Finance to address concerns of equestrian facility owners
TORONTO
Feb. 3, 2005
The Ontario government today directed the Municipal Property Assessment Corporation (MPAC) to review the criteria for the property tax classification of equestrian facilities. "I have asked MPAC to meet with representatives from equestrian associations to develop appropriate criteria for assessing equestrian facilities," Finance Minister Greg Sorbara said. "I expect to see a report about these criteria within the next month."
For the 2004 and 2005 taxation years, the property assessment and tax classification of several dozen horse farms and equestrian facilities across Ontario was changed from either "farm" or "residential" to "commercial," resulting in significant tax changes for many establishments. Pending the outcome of the review, the Minister of Finance has requested that MPAC not make any further changes to the classification of equestrian facilities.
"Last fall, the government addressed similar concerns about unexpected property tax classification changes from agricultural producers of maple syrup," said Steve Peters, Minister of Agriculture and Food. "We will continue to work towards establishing clearer property classification guidelines for other specific types of activities where current guidelines are leading to inconsistent treatment."
Ontario's property tax system benefits farm property owners by providing:
- Lower property assessment treatment of farm properties
- A tax rate for qualifying farm properties that is the lowest
property tax rate of any class of property
- An option which allows municipalities to further reduce the
municipal tax rate on all qualifying farm properties within
the municipality
- An option which allows municipalities to respond to individual
cases of hardship and provide property tax relief on a
case-by-case basis.
For more information visit www.gov.on.ca/fin
For further information: Sean Hamilton, Minister's Office, (416) 325-8679
Manuel Alas-Sevillano, Ministry of Finance, (416) 212-2155
UPDATE - JANUARY 27, 2005 & JANUARY 23, 2005 - see below
This affects all riders, horse owners, students, as well as the barn owners and all related horse industries and friends of horses!
DOWNLOADS
Click here to download the MPAC update from the July issue of WHOA!
Click here to download the May 9, 2005 Update (pdf file - Acrobat Reader)
Click here to download the March 11, 2005 Annoucement (pdf file - Acrobat Reader)
Click here to download the MPAC - Assessment of Equestrian Properties Questions & Answers (pdf file - Acrobat Reader)
Click here to download an example of an assessment of a Horse Establishment (pdf file - Acrobat Reader)
Click here to download the February 25, 2005 Update (Word)
Click here to download the February 13, 2005 Update (Word Document)
Click here to download the January 27, 2005 UPDATE (pdf file - Acrobat Reader)
Click here to download the campaign letters (pdf file - Acrobat Reader)
Click here to download the 1 page summary - post & pass on (pdf file - Acrobat Reader)
Click here to download the Update - Detailed Summary January 23, 2005 (pdf file - Acrobat Reader)
UPDATE - JANUARY 27, 2005
COMMERCIAL PROPERTY TAX ON HORSE FARMS
We met with the Ministry of Finance office Wednesday Jan 26th. In attendance were the Assistant Deputy Minister and the Director, Property Tax Policy Branch, along with Marcia Barrett and Al Patterson from OEF, Jim and myself (Leslie).
It was a very productive meeting. They were extremely appreciative of the information and they said they received a very good understanding of the issues for horse farms and affected parties. They will be meeting with the Minister of Finance, MPAC and others. They said they will be getting back to us in 2 weeks. This is extremely fast for government. We are cautiously optimistic!
It is important for everyone to stay united on this issue. I am hearing that people are very scared and some may want to organize a formal protest or worse. Please be concerned but do not panic. Please stay professional, informed, ask others to check the OEF website www.horse.on.ca for updates, help others take part in the letter writing campaign, contact MPP’s, and media if you want and suggest they can also contact us or ARE/OEF …… and then wait. I know this is very difficult. Please be patient. We are very hopeful.
We are getting cooperation from all government offices – they need time to process this. They are actually moving very fast! They are even calling the committee back together to discuss the, ‘Definition of a Farm’, and we are asked to participate. We also discussed issues with ROMA (Rural Ontario Municipal Association) and asked for their support. This is all good!
Call ARE, OEF or myself if you have been reassessed. If you are reassessed, it can take months before you get the assessment notice and then months before you get a tax bill. If re-assessed, you have time to go through the appeal process – pay attention to deadlines. It is worth it. We saved $1000’s. Taxes are still high but much better. You probably will have significant changes, depending on how accurate the original assessment was and your particular operation. Most have lots of room to negotiate. We can give you tips on this. If you owe increased tax due to this issue, talk to your municipality – they are usually very understanding – explain what is going on with the Committee that is addressing the commercial classification with horse farms.
If you have been getting nowhere in the appeal discussions with your local MPAC office, call MPAC in Pickering or us.
The media has been picking this up all over the province. This is great. This is how horse people and others are finding out about this! Please contact your local papers. You could pass them the 1 page summary or press release from the OEF web site.
Finance said they have lots of letters! Many from little girls! Keep them coming in! The letters are definitely making a difference!
See www.horse.on.ca for updates and the letter writing campaign. There is a detailed summary on the OEF site also that could be very helpful for anyone needing all the details. Call us if you have more questions.
DOWNLOADS
Click here to download the MPAC update from the July issue of WHOA!
Click here to download the May 9, 2005 Update (pdf file - Acrobat Reader)
Click here to download the March 11, 2005 Annoucement (pdf file - Acrobat Reader)
Click here to download the MPAC - Assessment of Equestrian Properties Questions & Answers (pdf file - Acrobat Reader)
Click here to download an example of an assessment of a Horse Establishment (pdf file - Acrobat Reader)
Click here to download the February 25, 2005 Update (Word)
Click here to download the February 13, 2005 Update (Word Document)
Click here to download the January 27, 2005 UPDATE (pdf file - Acrobat Reader)
Click here to download the campaign letters (pdf file - Acrobat Reader)
Click here to download the 1 page summary - post & pass on (pdf file - Acrobat Reader)
Click here to download the Update - Detailed Summary January 23, 2005 (pdf file - Acrobat Reader)
UPDATE - JANUARY 23, 2005
COMMERCIAL PROPERTY TAX ON HORSE FARMS
Detailed summary – Jan. 23, 2005
In 2003 and 2004, the Municipal Property Assessment Corporation (MPAC) initiated an aggressive program of reassessments across the province. MPAC has begun to apply a little used legislative provision to reassess the property tax classification for boarding and lesson stables. Instead of assessing them as rural residential or farming they are assessing them as COMMERCIAL. This is happening all over Ontario. Many equine-related businesses such as breeding and training horses, or providing services to racehorses are deemed agricultural uses. However, according to a senior MPAC official, Carmelo Lipsi, “any properties that fall into grey areas, like equestrian facilities, automatically default to commercial class.”
A commercial classification means that the properties are taxed at a much higher rate. If the property assessment goes from farmland to commercial this can mean an increase of as much as 2600% depending on tax rates in your municipality. In dollars, that translates to tax bills going up by $10,000, $15,000, $20,000 or more. The financial impact is so severe that some horse farms have already gone out of business and many others are sure to follow.
On August 18, 2004, the Association of Riding Establishments of Ontario (ARE) formed a committee to address the property tax issues surrounding horse farms and riding establishments. The mission of the ARE-ONT MPAC Committee is to research the issues presented, making information available to fellow stable operators, following through with the necessary letter writing and/or petitions, working with other affected groups such as the Ontario Therapeutic Riding Association, and to taking the steps necessary to assist MPAC in making fair assessments of property utilized for equines.
Since August, volunteer co-chairs of the Committee, Jim Waechter and Leslie Brooks, have been diligently researching and organizing the steps necessary to make these changes. In addition to meeting with politicians, agricultural groups and members of MPAC itself, Jim and Leslie have spearheaded a letter writing campaign in order to draw attention to the disastrous consequences of the recent property assessments by MPAC on equine establishments. The ARE is also working with the Ontario Equestrian Federation (OEF) in order to have a single strategy to get the changes that are needed. It is important that all equestrian facilities work together on this issue.
The letter writing campaign package includes 6 letters that address the Minister of Finance, President of MPAC, Minister of Agriculture and Food, Minister of Municipal Affairs and Housing, Minister of Health and Long-Term Care and Minister of Tourism and Recreation. It is working! Keep them coming in.
The letters are available from the Ontario Equestrian Federation (OEF) Office as well as on the OEF website: www.horse.on.ca
The information contained in this document is made possible from the research done to date. Every attempt has been made to be accurate and to give as much detail as possible to help you understand the most important issues. For further clarification or information, contact the ARE Committee.
The Way it has been Historically and is Today for Most Farms:
A small percentage of the 53,000 horse farms in Ontario have been reassessed as commercial. MPAC says they reassessed 450-500 in 2003 and more in 2004. Some were actually done as far back as the 1980’s. It is impossible to get exact numbers. We have documented details of approximately 50 from across the province that have been reassessed as commercial.
Horse farm properties are typically on land ‘zoned’ as agricultural but zoning is irrelevant for property assessment purposes.
Most horse farm businesses today have ‘property assessment valuations’ as farmland or rural residential and a ‘tax rate’ of either farm or residential. The one acre around the house should be assessed as farmland if the owner of the property is the resident farmer or it will be assessed as a residential acre if there is only a tenant farmer. The residence and the one acre is always at a residential ‘tax rate’, regardless of how that acre is assessed for property assessment valuation purposes.
It is important to note that if the property is assessed as farmland, then you will have a residential tax rate on the land and the farm buildings, unless you qualify for the ‘Farm Property Class Tax Rate’ which is usually 25% of the residential rate for your municipality. See www.omaf.gov.on.ca for information on Farm Property Class Tax Rate application and qualifications.
What is starting to be enforced by MPAC:
Under the current legislation the property assessment valuation for horse farms that do breeding, racehorse maintenance, and raising/training/selling of horses is farming and as such MPAC usually assesses them correctly as farmland. After this it gets very confusing and inconsistent. If you give lessons or have boarders MPAC says we fall into a grey area and that defaults to commercial.
If You Own or Lease a Barn – and you offer boarding or lessons – you are at risk. This is probably the case if you give trail rides also. It doesn’t matter if you have one boarder or one hundred – teach two lessons a week or two hundred – whether you have three acres or one thousand - your facility can be reassessed and all or part of the property and farm buildings will be changed to Commercial. New building permits will certainly cause a reassessment. Also, an assessor may just decide to drop in. We suggest you ask them to book an appointment and come back at a more convenient time. You may not have this option because some assessments are done even when you are not home! They may ask your clients for information or simply do it on their own. Regardless of how they get their information, assessors are making business and life changing decisions for barn owners.
Typically, MPAC seems to be taking all farm buildings as 100% commercial and a number of acres. The rest MPAC may change to rural residential or leave some as farmland and some as rural residential. Whatever the split they do can usually be challenged. It depends on the mix of horses you have on the property and their purpose. The end result could be an assessment where a percentage of the buildings and land is assigned to all three – commercial, farm and rural residential. At the moment this is the best you can hope for.
In addition to the current year increase, MPAC makes the reassessments retroactive up to two years for newly assessed buildings resulting in, for many equestrian facilities, property tax bills for $10's of thousands of dollars, some due and payable in a matter of weeks. Individual barn owners simply don't generate the revenue that commercial property rates were established for. If a reassessment is done on previously assessed buildings, it can be applied to the current year and future years only. The changes for the future years are bad enough but the retroactive tax bills can be financially disastrous.
Barn owners cannot give our clients retroactive bills. MPAC can!
The appeal process is documented at www.mpac.ca . You must pay particular attention to deadlines. The process is worth the trouble. We were assessed 100% commercial and received a retroactive bill for approximately $15,000. We asked MPAC to reconsider and were told it was assessed correctly and there was no need to reassess but we persisted. We educated ourselves on the issues so that we were prepared to answer the assessor’s questions. We took the lead, as needed, to give him accurate information and after a second reassessment, it was significantly reduced. It was well worth it! If you would like tips and help from someone that has been through the process, call the Association of Riding Establishments or MPAC Committee Chairs, Leslie Brooks & Jim Waechter at 519-696-3688 or email JLnet@Quixnet.net . You may also want to consult a Property Tax Consultant. Ironically, many consultants used to work for MPAC.
If You Own a Horse and your barn is reassessed - your board will go up – way up. Even worse, the farm may be forced out of business and your horse will be homeless.
If You Take Lessons and your barn is reassessed – your lesson costs will increase – dramatically. You may even have to find a new place to ride, if your barn has to close.
If You Provide Services to the horse industry and the number of horse farms are significantly reduced – who will be your clients?
If there are far less horse farms, there will certainly be less horses and riders. Who will you sell your horses to? Who will buy all the hay and grain? Even Real Estate sales are already affected. Some people are re-considering whether to purchase a horse farm or not because of the possible property tax issues. How do you sell a property with such a high property tax? Others are postponing farm building improvements and the building of new barns and arenas. Will the equine industry be able to afford new trucks and trailers? Who will be around to go to horse shows? Many major decisions are already being influenced by this commercial taxation of horse farms.
The Future:
If this commercial taxation of horse farms continues, the ramifications will be far reaching. The financial impact is so severe that many horse barns will not survive. In his, "Economic Impact of the Ontario Horse Industry," survey, The Ontario Minister of Agriculture and Food (OMAF) Veterinary Scientist, Dr. Robert Wright, indicates the equine industry's annual economic impact in Ontario is $579.1M annually, with an additional $5.9B invested in fixed assets. Not only will the farming industry, already reeling from it's many challenges, be affected by reduced consumption of hay, feed and bedding material, veterinarians, blacksmiths, equipment suppliers, farm improvement contractors and more than 51,000 people directly employed by equestrian facilities will be hurt by MPAC's decision. There are over 53,000 horse barns across the province and more than 253,000 Ontarians ride horses to enjoy the vigorous physical workout and many other recreational benefits equestrian facilities provide. These reassessments will close the barns and take a healthy lifestyle choice away from thousands of Ontario residents.
The province’s “Rural Plan” states that Ontario’s success depends on building strong communities, a strong economy and a healthy environment in rural Ontario. The plan acknowledges the important contributions that rural Ontario makes to the economic vitality of the entire province.
Riding establishments are not the playgrounds of the wealthy. Providing riding lessons to children and adults, children’s summer camp programs, therapeutic riding programs for the disabled or boarding and caring for horses is much more a labour of love than a lucrative business venture. Many families make real sacrifices so they can enjoy time with horses in a rural setting. Most stables are small agribusinesses with very high input costs and narrow profit margins. It is simply not feasible to expect that a riding establishment could pass on a commercial taxation rate to their customers and stay in business.
MPAC is inconsistent in its evaluations and does not recognize that equestrian facilities have the same agricultural uses and services, as the horse racing industry.
A note of support received from Edward Kendall, President of Equine Canada: “ Equine Canada identifies riding establishments as important contributors to the livestock industry. These facilities are part of a value-adding chain that is characteristic of most livestock sectors. Equine Canada supports the recognition of stables as facilities for the intermediate care of horses and thus their inclusion in agricultural property bases.”
We believe and the OEF believes that “Horses are livestock. Livestock farming is an agricultural activity. This activity may include, but is not limited to, the breeding, raising, training, showing and maintenance of livestock.” All horse maintenance should be considered farming for property assessment purposes. Current legislation for property valuation purposes, Section 19(5) of the Act, recognizes racehorse maintenance as farming. We believe it should be ‘horse maintenance’, regardless of what you are doing with the horses. We all have the same issues, similar expenses, and farm chores! We are not trying to change what is defined as ‘farm income’ for Revenue Canada purposes. We are not challenging what determines the Farm Property Class Tax Rate. If we qualified before, we will still qualify. We are concerned with Property Assessment Valuations; we are farmlands not commercial. At least with income tax – we can make a profit before we pay tax. Under current enforcement, MPAC will have you pay property taxes at commercial rates if you have any dollars coming from lessons or boarders. Profit or no profit.
We need legislative clarification and change. We are in the midst of discussions with various government ministries. Ultimately, it will be a decision made by the Minister of Finance, Greg Sorbara. The committee hopes that the cooperation continues and that the discussions are successful and legal action will not be necessary. This will be extremely costly. We have had contact with several lawyers who are keen to take on our case. We may need donations to help the cause. We will let you know or you can contact ARE. A fund has been started.
For your Information – MPAC had a letter sent to the Ministers as a response to our letter writing campaign and they posted it on their website dated Dec 17, 2004. It was inaccurate. It said that selling of horses is commercial. Raising livestock and selling is considered farming. I called MPAC and they are revising the letter. They also wrote that most farms were reassessed from residential to commercial and it is more likely that they went from farmland to commercial. Some may have been residential. They agreed. Please note that they also use the word ‘training’ to mean training of people – lessons.
WHAT YOU CAN DO TO HELP:
Help us inform and educate everyone about this tax. Barn owners and all stakeholders need to be aware of what is happening and help fight the commercial taxation of horse farms. It is destroying our industry. The sport will become a sport for the wealthy. You can find a one page summary on the OEF site www.horse.on.ca . Please hand it out and post it everywhere – tack shops, barns, and feed stores, etc.
To show the government that you care, go to www.horse.on.ca . Follow the link to MPAC – Tax Crisis – Letter Writing Campaign. Print the letters, sign and send. Give copies to your barn, friends, your parents – anyone who is over 18 and cares about the future of the equine industry. The letters are working! They create political pressure.
We need to educate people that the majority of horse people are not wealthy – this is a misconception. I have heard this from several sources – that MPAC people and others have said that it is about time those rich horse people pay their dues. This is so far from the truth, it is almost funny! Why do I muck stalls? Why are the parents sacrificing so much just so little Sally can ride?
Talk and write to your municipalities, your MPP’s, opposition critics to the Ministers, newspapers, TV. You can direct them to the ARE Committee chairs or ARE for details and interviews. Please help get the media involved. This also creates political pressure. They need to understand how devastating this will be to you, the rural economy, the horse industry and everyone that rides or owns a horse, not just the barn owners and service providers. We have had a lot of exposure – CBC TV Toronto, CBC radio and CKCO TV from Kitchener plus a number of newspapers but we need more.
So many in our industry do not know this is happening so please pass the information on.
For updates, you can visit www.JLEquestrianCentre.com. Please post our updates on your site or create a link. We must help all barn owners and others know the issues. We must come together on this issue.
Thanks to all of you for your part, the volunteers helping us directly and all the supporters! You are great! The horses and ponies are very grateful!
IF YOU HAVE BEEN REASSESSED, would like updates sent to you directly, or would like to offer more help, please contact the ARE MPAC Committee Chairs, Leslie Brooks & Jim Waechter at 519-696-3688 or email JLnet@Quixnet.net . We are continuing to document the impact across the province including the inconsistencies. We may be able to give you some tips. We have been through the process! You may also want to use a Property Tax Consultant.
DOWNLOADS
Click here to download the MPAC update from the July issue of WHOA!
Click here to download the May 9, 2005 Update (pdf file - Acrobat Reader)
Click here to download the March 11, 2005 Annoucement (pdf file - Acrobat Reader)
Click here to download the MPAC - Assessment of Equestrian Properties Questions & Answers (pdf file - Acrobat Reader)
Click here to download an example of an assessment of a Horse Establishment (pdf file - Acrobat Reader)
Click here to download the February 25, 2005 Update (Word)
Click here to download the February 13, 2005 Update (Word Document)
Click here to download the January 27, 2005 UPDATE (pdf file - Acrobat Reader)
Click here to download the campaign letters (pdf file - Acrobat Reader)
Click here to download the 1 page summary - post & pass on (pdf file - Acrobat Reader)
Click here to download the Update - Detailed Summary January 23, 2005 (pdf file - Acrobat Reader)
PROPERTY TAX CRISIS FOR HORSE FARMS
On August 18, 2004, the Association of Riding Establishments of Ontario formed a committee to address the property tax issues surrounding horse farms and riding establishments. In the absence of clear policy direction or due regard for the largely agricultural nature of the land use, Municipal Property Assessment Corporation (MPAC) is arbitrarily assessing riding establishments in their entirety as commercial rather than agricultural. This results in an increase in property taxes from, depending on the municipality, an agricultural rate of 0.3% to a commercial rate of 4%, an increase in excess of 1300%. The financial impact is so severe that some horse barns have already gone out of business and many others are sure to follow.
The mission of the ARE-ONT MPAC Committee is to research the issues presented, making information available to fellow stable operators, following through with the necessary letter writing and/or petitions, working with other affected groups such as the Ontario Therapeutic Riding Association, and to taking the steps necessary to assist MPAC in making fair assessments of property utilized for equines.
Since August, volunteer co-chairs of the Committee, Jim Waechter and Leslie Brooks, have been diligently researching and organizing the steps necessary to make these changes. In addition to meeting with politicians, agricultural groups and members of MPAC itself, Jim and Leslie have spearheaded a letter writing campaign in order to draw attention to the disastrous consequences of the recent property assessments performed by MPAC on equine establishments. It is the Committees’ hope the campaign will help address the severe financial hardship that MPAC is placing on Ontario’s riding establishments through inequitable and inappropriate taxation.
This issue affects all riders, horse owners, students, as well as the barn owners and all related horse industries and friends of horses. If the equine facilities in Ontario are forced to close their doors due to unreasonable tax bills, there will be nowhere for owners to board their horses, nowhere for our youth to learn how to ride and nowhere for the people of Ontario to enjoy "the horse" as an activity of choice, whether it be for recreation, education, health, career, or sport.
The letter writing campaign package includes 6 letters that address the Minister of Finance, President of MPAC, Minister of Agriculture and Food, Minister of Municipal Affairs and Housing, Minister of Health and Long-Term Care and Minister of Tourism and Recreation.
The letters were circulated at the recent ARE-ONT and OEF Annual General Meeting and Conference held at the Four Points Sheraton Kitchener November 26-28 and met with great concern and support. The letters are currently available from the Ontario Equestrian Federation (OEF) Office as well as on the OEF website.
DOWNLOADS
Click here to download the MPAC update from the July issue of WHOA!
Click here to download the March 11, 2005 Annoucement (pdf file - Acrobat Reader)
Click here to download the MPAC - Assessment of Equestrian Properties Questions & Answers (pdf file - Acrobat Reader)
Click here to download an example of an assessment of a Horse Establishment (pdf file - Acrobat Reader)
Click here to download the February 25, 2005 Update (Word)
Click here to download the February 13, 2005 Update (Word Document)
Click here to download the January 27, 2005 UPDATE (pdf file - Acrobat Reader)
Click here to download the campaign letters (pdf file - Acrobat Reader)
Click here to download the 1 page summary - post & pass on (pdf file - Acrobat Reader)
Click here to download the Update - Detailed Summary January 23, 2005 (pdf file - Acrobat Reader)