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A mansion is under construction in Richmond, B.C., on land that could be used for farming.Ben Nelms/The Globe and Mail

The B.C. government is pledging to act "quickly" to revise farm tax breaks so they can't be exploited by investors who buy agricultural land but do little or no farming.

Peter Fassbender, the minister responsible for overseeing property assessments and farm taxation, said Monday the province will now consider making those investors pay significantly higher taxes.

"If there is something people are taking unfair advantage of, then I think we have to take a hard look at that and close those loopholes," the Minister of Community, Sport and Cultural Development told The Globe and Mail in an interview. "We have proven time and time again, when action is needed we can move very quickly."

Mr. Fassbender is responding to a Globe investigation that found 60 per cent of investors who bought suburban Vancouver farmland between August, 2015, and last summer for more than $2-million per parcel were not farmers. The investigation found those local and foreign buyers enjoy huge tax breaks meant to encourage farming but which often subsidize wealthy investors instead.

Related: Speculators buying B.C. farmland while exploiting tax breaks

Related: B.C. says local council responsible for regulating residential use of farmland

Related: B.C. considers tax changes for farmland speculators

The Globe examined 122 transactions and found the properties' total assessed values – determined by the province – are almost 10 times less than their total market value. With extra farm subsidies factored in, some landowners are paying about 100 times less in annual taxes than they would if their property was in a residential area.

Some of the speculators are applying to get the land rezoned and released for development. Other investors are building multimillion-dollar mansions and paving over the rich soil. The Globe found some of the megamansions were set up to operate as luxury hotels, which is illegal on farmland.

Metro Vancouver, which represents 21 municipalities, is asking the province to overhaul the entire tax system governing agricultural land, which currently values farmland based on the quality of the soil, not the price investors are paying for it. In a report published in September, it said it wants property owners who don't farm the land to pay full municipal taxes. It suggested that only those whose land reaps significant farm income should get maximum breaks.

Mr. Fassbender said the recommendations are now being looked at closely.

"We are serious about looking at the issues that have been raised," he said, adding that the Globe's investigation had an impact. "When you have an organization like Metro Vancouver combined with the work that you are doing that's brought this to our attention, we definitely take it seriously."

The province is also being criticized by municipal leaders, including the mayor of Richmond, for not taxing foreign buyers who purchase vacant farmland. British Columbia's new 15-per-cent foreign buyer tax applies only to the market price of the farmhouse, not the land, which accounts for most of the purchase price.

A Finance Ministry spokesman told The Globe the tax was only brought in to curb foreign investment in residential areas in and around Vancouver, where the government saw the most recent activity.

"We are continuing to monitor that data," said Jamie Edwardson.

The Globe investigation found 10 of 122 farmland purchases involved numbered companies, which is a way to avoid property transfer taxes. Buyers simply purchase the company shares through what's called a bare trust. No sale is registered, so no tax applies. The Finance Ministry said the province may still try to get rid of that tax dodge, which could be tricky because other business owners could suffer.

"It could be as simple as I own a convenience store and I happen to own the land and the building, someone buys my business or a portion of my business … does that require additional tax to be paid?" Mr. Edwardson said.

Frank Leonard, chair of the Agricultural Land Commission, which oversees B.C.'s protected farmland, said he'd be happy to see higher property taxes for wealthy investors around Vancouver – as long as it doesn't hurt farmers elsewhere.

"Good solutions often require some heavy lifting," Mr. Leonard said. "The solution has to be very precise."

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