Classifying Horse Operations for Farm Assessment

Horse Rearing as Primary Agricultural Production

Rearing horses for sale is considered primary agricultural production and may qualify property for farm assessment. Land used as a mixed operation of horse breeding, raising, training and boarding may be eligible for farm classification, although only income from the sale of horses is considered qualifying income for farm assessment purposes.

Income from boarding, training, rental, showing, stud fees, or racing and breeder's bonuses will not be included as qualifying income for farm classification.

Equestrian centres, horse boarding, training or rental facilities will not be eligible for farm classification unless they are operated in conjunction with rearing horses for sale, and the horse rearing operation meets minimum production and sales requirements. Related non-farm activities such as restaurants, snack bars and lounges are classified Business & Other.

What is required for a farm operation to qualify for farm classification?

• Horses must be raised and sold on the land in the 12-month period ending October 31 prior to the tax year.
• The minimum requirements for the production and sales of qualifying products must be met.
• An operation that has yet to meet the income requirement must file a development plan with the assessor and have enough animals on site by October 31 to meet the income requirement within the coming year.

Receipts for purchase (applicable only where horses are not born on the farm) and sale must be made available to the assessor upon request.

• The farm must meet its annual income requirement based on the sales prices (less any purchase costs) of horses reared on the farm. Income from horse rearing is calculated in the following way:
• if a horse was purchased for $1,000, trained and sold for $4,000 two years later, the income would be $4,000 - $1,000 = $3,000 in the year of sale.
• if a foal was born on the property and sold two years later for $4,000, the income is be $4,000 in the year of sale.

In most cases, a horse rearing operation must sell at least one horse each year in order to continue to qualify for farm classification.

When is the application required?

For land to be classed as farm for the next taxation year, the owner must submit an application for farm classification to the local assessment office. Application forms are available on the website in the forms section or at your local BC Assessment office.

Applicants are encouraged to submit their farm applications to the local BC Assessment area office as soon as possible. Early application will assist in providing BC Assessment staff time to inspect and review the farm operation.

Property already classed as farm land must continue to meet the requirements for farm class on or before October 31 to receive farm classification for the following year. BC Assessment may require you to provide additional information in support of continued farm classification.

For more information on farm classification, contact your area BC Assessment office or visit www.bcassessment.ca.