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Farm Status in BC and the Agricultural Land Reserve, Explained

Farm status and the ALR get mixed up constantly, but they are 2 separate systems. BC Assessment decides whether land is classed as a farm for property tax, and the Agricultural Land Commission decides what you can build and do on land in the reserve.

By Shawn Kandola, PREC · Published November 5, 2026 · 8 min read

2 systems that answer 2 different questions

Before you look at a hobby farm, keep these apart. Farm status answers how the land is taxed. The ALR answers what you are allowed to do with it. A 5 acre parcel can be in the ALR with no farm status, or classed as a farm while sitting outside the reserve.

How BC Assessment farm class works

Farm class is voluntary. You apply to BC Assessment with the General Application for Farm Classification by October 31 for the following tax year, and BC Assessment says late applications are not accepted, so missing the date costs you a full year. You do not reapply every year, but BC Assessment periodically asks for income or lease information and asks owners to keep proof of sales for at least 3 years.

The land has to be used for a qualifying agricultural use listed in the regulation, such as fruit and vegetable production, livestock raising, forage, horticulture, floriculture, beekeeping, Christmas trees, turf or seed production. Some things do not count: products for your own household, manufactured products made from farm raw materials such as sausages, and agricultural services. That last one matters for horse owners, because income from boarding and training horses does not qualify, while selling horses raised on the farm does.

Leasing works too. If you buy acreage and lease it to a farmer, you still apply as the owner, there must be a lease, and the farmer's operation has to meet the income requirement.

The income thresholds by parcel size

The regulation calls the test gross annual value, which is the farm gate value of the qualifying products the farm sells. For an established farm, it has to be met in at least 1 of 2 reporting periods, which are your income tax years ending 2 and 3 years before the tax year, and a qualifying product has to be sold in every reporting period. For the 2028 tax year, those are the income tax years ending in 2025 and 2026. New farms and farms still being developed are handled differently, and a farm development plan has to be filed by October 31.

Notice the small-lot trap: under 0.8 ha, you need 4 times the sales of a 5 acre hobby farm.

How farm status changes your property tax

Farm class does not lower the tax on everything. Only land goes into Class 9, farm, where it is valued at regulated farm land rates, which BC Assessment says result in lower assessed values than market value. Buildings, including the farmhouse, are valued at market value and classed as Class 1, residential.

Inside a municipality like Abbotsford or Chilliwack, farm buildings other than the house are exempt by $50,000 or 87.5% of their assessed value, whichever is greater, so $500,000 of barns is taxed on $62,500, while the farmer's dwelling is fully taxable. In rural areas outside a municipality, farm buildings including the dwelling are exempt from general provincial tax, but the dwelling stays taxable for school purposes.

If the land stops qualifying, BC Assessment reclassifies it and the land value changes. For a sense of scale, Abbotsford reported that in 2017 farm class properties produced only 2.1% of its total property tax revenue, even though nearly 75% of the city's land is in the ALR.

What the ALR allows: homes

The ALR is a provincial zone for farming. The Agricultural Land Commission Act and its regulations override local zoning, and a city can be stricter than the ALC but never more permissive. Check any parcel on the ALC's Is My Property in the ALR map. For housing, the rules are:

• Principal residence: 500 m² of total floor area or less, measured to the outside of the walls, leaving out attached garages and carports up to 42 m² combined, basements, crawl spaces and attics formed by roof trusses.
• Secondary suite: 1 suite, entirely inside the principal residence, if local rules allow suites.
• Additional residence: allowed if only 1 home is on the property when construction starts. It must be detached and can be up to 90 m² on parcels of 40 ha or less where the main house is 500 m² or less, or up to 186 m² on parcels over 40 ha. Family, farm workers or tenants can live in it if local rules allow.
• Duplexes, triplexes and townhouses are not permitted in the ALR, even under the Province's small-scale multi-unit housing rules.

What the ALR allows: other uses

The ALR Use Regulation lists other uses you can carry on without an application, though local governments can restrict some of them. Anything else needs a non-farm use application, which costs $1,500. Placing fill or removing soil may need a Notice of Intent ($150) or a soil use application ($1,500). And under current rules only the Province, local governments, First Nation governments and prescribed bodies can apply to exclude land, so a private owner cannot apply to take land out of the reserve.

• Farm retail sales, if everything sold is produced on the farm, or the total retail area is 300 m² or less and at least 50% of it sells products from the farm or the farm's association.
• A home occupation in an accessory building on the same parcel as a home, up to 100 m² unless a local bylaw sets a different limit.
• Short-term tourist accommodation of up to 4 bedrooms in the principal residence.
• Agri-tourism accommodation of up to 10 sleeping units on land classed as a farm, using less than 5% of the parcel, on a seasonal or short-term basis.

Buying a farm-class property in the Fraser Valley

If you buy land already classed as farm and you plan to keep farming, BC Assessment requires you to submit your own General Application by October 31. If you will not farm it, BC Assessment asks you to let them know. Ask the seller for their sales records and any lease, because those show whether the operation really meets the threshold.

Expect the noise, dust and smells of normal farming next door. The ALC reminds buyers that the Farm Practices Protection (Right to Farm) Act protects normal farm practices even when neighbours complain.

When I walk hobby farm buyers through acreage in the Bradner area of Abbotsford, we sort the plan into 2 lists early: what the ALR lets them build, and what it takes to reach the farm class threshold. To see what is available, start with farms and acreages for sale in Abbotsford, acreage listings around Chilliwack or rural acreage in Mission, then work through the full land buying checklist and how to test a well and inspect a septic system.

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