For release: April 30, 2004
Mcguinty Government Exempting Family Farms
from Land Transfer Tax
Strengthens Ontario's farm families, future generations
TORONTO - The McGuinty government is building a stronger, more
prosperous rural economy by exempting the land transfer tax for farms
that change ownership between members of the same family, Agriculture
and Food Minister Steve Peters announced today.
"This will help pass on the farming tradition to future generations,"
said Peters. "Ensuring the smooth succession of the family farm is
a key element in building a more sustainable agriculture industry and
stronger rural communities. With this exemption, we are making it easier
for farm families to plan for the future, which will ultimately benefit
all of rural Ontario."
The exemption is effective as of March 28, 2003, and applies to farmers
who transfer land from one family member to another, typically when a
new generation is taking over a farm. It complements an existing exemption
that applies when farmland is transferred from a family member into a
family farm corporation.
"The strength of Ontario depends on the strength of rural communities,
as well as our cities," Finance Minister Greg Sorbara said. "The
agriculture industry makes an important contribution to this province's
economy and quality of life. We want to encourage the continued participation
of new generations of farmers in Ontario."
Additional information about the exemption is available on the Ministry
of Finance website at www.trd.fin.gov.on.ca.
BACKGROUNDER
LAND TRANSFER TAX EXEMPTION FOR FAMILY FARMS
The McGuinty government continues to deliver real, positive change in
how government works for the people of Ontario by exempting the land transfer
tax on farm land that changes ownership between members of the same family.
This measure will help pass on the farming tradition to future generations
and build a stronger, more prosperous rural economy.
General
- Ordinarily, a transfer of farmed land is subject to land transfer
tax, which can range from 0.5 to 2 per cent, depending on the value
of the property.
- Exemptions may apply when:
- there is a transfer of farmed land to a family farm corporation,
as long as the corporation continues to farm the land under the
direction of the transferor or his/her relatives, and the corporation
shareholders are related.
- the transfer of farm land is between related individuals and it
continues to be farmed (effective as of March 28, 2003).
- Eligible family members include: spouse, child, mother, father, brother
or sister and spouse/ descendants, cousins and descendants. Grandparents,
certain spouse's relatives and a transferor's same-sex spouse are also
eligible family members. This is consistent with the current exemption
for transfers into a family farm corporation.
Qualifying for Exemption
- The person or people who buy/receive the transferred land must be
related to the transferor and either they or their relatives must continue
to farm the land. In the case of a transfer to a family farm corporation,
all the shares must be owned by people who are related to the transferor,
and the corporation must continue to farm the land under the direction
of one or more family members.
- 95 per cent of the assets of the family farm corporation must be farming
assets.
- Further details of the exemption are outlined in Tax Bulletin LTT2-2004
Exemption for Certain Transfers of Farmed Land
How to apply
- To obtain Tax Bulletin LTT2-2004, which is available at www.trd.fin.gov.on.ca,
or contact:
Ministry of Finance
Motor Fuels and Tobacco Tax Branch
Land Taxes Section
33 King Street West
P.O. Box 625
Oshawa, Ontario L1H 8H9
Tel: 905-433-6361
Fax: 905-436-4511
Media Contact:
Mary Devorski
Minister's Office
416-326-3077
416-606-8303 (mobile)
Diane Flanagan
Minister Sorbara's Office
416-212-0634
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