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Buying a piece of farmland for tax benefits?

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  • Feb 20th, 2018 4:30 pm
[OP]
Deal Fanatic
User avatar
Aug 10, 2011
9517 posts
2078 upvotes
Somewhere

Buying a piece of farmland for tax benefits?

I've heard rumours about people buying a small piece of farmland off rural farmers in Ontario, then using it for tax benefits. The farmer sells a small patch of land, gets immediate cash, and continues to farm it, and keeps and sells the crops.. win-win for both.

Anybody heard of this? Is this fake news? I've tried doing some brief research, but did not find anything..
:confused:
6 replies
Member
Apr 27, 2014
371 posts
123 upvotes
Mississauga, ON
Active farmland can qualify for reduced property taxes but buying land to pay property taxes isn't exactly a tax benefit.
Deal Addict
Aug 30, 2011
3462 posts
1222 upvotes
Ottawa
No benefit. We bought (in 2001) a rural property on which we allowed a farmer to cash crop (alternate years, corn and soybeans) on a 5 acre parcel. The reduction in property taxes was not sufficient to bother with the paperwork. Nor did we ask the farmer to pay rent, as cash cropping isn't hugely profitable.

Also, one can't just sever land easily. We were permitted 2 severances on the original parcel (38 acres) but farmland across the road was not severable. We just sold the remaining parcel and left that 5 acres as part of the sale since no additional severance was allowed.

I don't see where there'd be any payoff on your scenario, even if a severance was permitted.
[OP]
Deal Fanatic
User avatar
Aug 10, 2011
9517 posts
2078 upvotes
Somewhere
OttawaGardener wrote: No benefit. We bought (in 2001) a rural property on which we allowed a farmer to cash crop (alternate years, corn and soybeans) on a 5 acre parcel. The reduction in property taxes was not sufficient to bother with the paperwork. Nor did we ask the farmer to pay rent, as cash cropping isn't hugely profitable.

Also, one can't just sever land easily. We were permitted 2 severances on the original parcel (38 acres) but farmland across the road was not severable. We just sold the remaining parcel and left that 5 acres as part of the sale since no additional severance was allowed.

I don't see where there'd be any payoff on your scenario, even if a severance was permitted.
I see. Thank you for your insight.
:confused:
Sr. Member
Dec 15, 2015
692 posts
504 upvotes
Toronto
Really depends on the location.

Person above said they didn't even charge for the 5 acres they let the farmer farm. In some areas they just threw away thousands of dollars.
Deal Addict
Aug 30, 2011
3462 posts
1222 upvotes
Ottawa
TheMaterial wrote: Really depends on the location.

Person above said they didn't even charge for the 5 acres they let the farmer farm. In some areas they just threw away thousands of dollars.
Nope. The land isn't tile drained, and weather affects income many years.

This past spring, my brother-in-law, who cash crops several hundred acres, almost couldn't get his fields seeded because it was wet into June. Trust me, I know what I'm talking about. (Eastern Ontario). Perhaps farmers in southern Ontario are rich Smiling Face With Sunglasses
Sr. Member
Dec 15, 2015
692 posts
504 upvotes
Toronto
OttawaGardener wrote: Nope. The land isn't tile drained, and weather affects income many years.

This past spring, my brother-in-law, who cash crops several hundred acres, almost couldn't get his fields seeded because it was wet into June. Trust me, I know what I'm talking about. (Eastern Ontario). Perhaps farmers in southern Ontario are rich Smiling Face With Sunglasses
All I said was it's area dependent...and just because you didn't charge in your area doesn't mean others in Rural Ontario can't.

Southern Ontario - Peach and Wine country - 50+ years in the family and lots of experience with farm land in South Western Ontario ( Granton to Leamington - Soy, Cow corn, and variety of veggies ) Trust me I know what I'm talking about too. We rent out a portion of our farm to Mori Gardens and we make a decent amount for it.

P.s richest farmers I've come across are in the Windsor regions ( leamington ext). The money is red and litterally grows on a vine.

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