Proposed tax reforms may accelerate the construction of farmland mega-mansions at the expense of food growing productivity, Metro Vancouver warns.

Metro's agriculture committee cautions the property tax changes intended to help farmers, unveiled over the summer by the provincial government's B.C. Farm Assessment Review Panel, could end up reducing the amount of land producing food, encouraging more development of estate homes and increasing taxes on bare farmland.

Farms with homes currently have split property tax assessments – the portion of the land used for the home is taxed on the higher residential rate and the farmed portion is taxed at the lower agricultural rate.

That has long encouraged land to be farmed as much as possible and for farm owners to minimize their home footprint.

But the proposed reforms would eliminate the split assessment, taxing the entire property as agricultural.

The change would encourage residential areas to sprawl on farmland and would likely mean construction of more monster homes of 10,000 to 20,000 square feet or more, says Metro agriculture committee chair Harold Steves.

"There's been a big run on farmland to buy these huge mansions," Steves said.

By buying farmland instead of regular residential property, he said, those desiring a massive home on a country estate could get one at a fraction of the annual property tax bill they would otherwise pay.

"We've got multi-million dollar houses sitting in the middle of farmland that take advantage of the low assessed value," added Delta Mayor Lois Jackson.

Nor do owners of the giant country estates have to get their hands dirty themselves – Jackson said some rent out the portion of their land still to be farmed to someone who will grow hay in order to continue to qualify as "actively farmed" for an agricultural property tax assessment.

The manorization of farmland is a growing problem in Richmond, Surrey, Delta and Pitt Meadows.

Some municipalities, such as Delta, have drawn up bylaws to limit the size of the farm "home plate" and Steves said more councils may have to take that route if the proposals become law.

"We would like to see these properties farmed," he said. "Without some kind of controls, the land ends up with just huge estates and they're not farms."

Looser restrictions on non-farm use of agricultural land runs afoul of Metro Vancouver's goal of preserving the region's agricultural land base and expanding the amount of actively farmed land, the committee report says.

Agricultural land prices could go higher as a result of the changes, it says, further discouraging new farmers from entering the industry.

"In addition to decreasing actively farmed land, policies that allow the expansion of farm home plates increase the property values for farm land," it says.

Local cities also stand to lose property tax revenue if the split assessment ends and all farm land is taxed at the same lower agricultural rate.

The proposals would set a new minimum of $3,500 per year in farm income to qualify for the agricultural assessment classification, down from the old threshold of $10,000 for properties smaller than 0.8 hectares.

The province is expected to conduct its own review of the panel findings before introducing new legislation.

Richmond Mayor Malcolm Brodie, who sat on the provincial review panel, called the committee's response "a bit of an overreaction."

He said the panel had to balance the interests of urban and rural regions of the province, and try to define "who is a real farmer" for tax purposes.

For more on the panel findings see www.farmassessmentreview.ca.