Assessment of Farm Value

How the value of the farm enterprise was assessed

All primary production assets and liabilities were aggregated in order to calculate the net value of the farm enterprise. This included the net value of the:

• house and other buildings,
• land,
• capital improvement,
• machinery,
• plant and livestock etc.

Example assessment of farm value

If a farmer owned a $700,000 farm with a $250,000 mortgage, for the purposes of RAFS, the value of the farm was $450,000.

Value of home and curtilage may have been excluded

VEA?

For RAFS purposes, the value of the home and curtilage was excluded from the farm value where the farmer retained a life interest, freehold estate or leasehold interest in his or her principal home on the farm.    

Value of farm partnerships

In cases where a farmer has an interest in a farm partnership, the total value of the combined farm enterprise could not exceed $500,000.

Example assessment of farm value - partnership

Where a farm enterprise valued at $700,000 was owned by two brothers, each with shares of $350,000, the retiring farmer could not take advantage of RAFS since the total value of the combined farm enterprise exceeded $500,000.

A valuation conducted by DVA's licensed valuer requirements

An valuation conducted by DVA's licensed valuer of the farm land and other farming assets may have been required, for example, if the farmer's estimate appeared understated, or where the value of these assets was close to the $500,000 limit.

Value of farm owned by trust

Where a person's farm(s) and relevant farm assets were held within a trust structure, the usual rules regarding assessment of discretionary trusts did not apply. It was not the value of the farmer's interest in the trust that was to be valued, but rather the value of the farm and farm assets in which the farmer had a qualifying interest.