Farming Business Income Exemptions

If your annual gross farming business income was below $7,000, you may be eligible for one of the available farming business income exemptions. Please see below for further information:

Start-up Farming Business Income Exemption

A new farming business that has not yet earned $7,000 in gross farming income may be eligible for a start-up farming business income exemption. To be eligible for this exemption all of the following criteria must be met:

  • The farming business owner has started or plans to start a new farming business for which they will be entering the market for the first time and will be generating a farming income as defined by Canada Revenue Agency (CRA).
  • The farming business has not generated more than $7,000 in its previous income tax year.
  • The farming business owner requires a Start-up Farming Business Income Exemption in order to apply to a Provincial program.
  • The farming business owner must clearly demonstrate that the property is being farmed and that the farming business will have an annual gross income of at least $7,000 in future years. The length of the start-up period must be realistic for the commodity produced.
  • The farming business has filed or will be filing income taxes and can provide them upon request to validate farming business income and expenses. (Failure to provide requested tax records may result in this application being denied)

If the property owner or tenant farmer is applying for a start-up exemption for the purposes of meeting an eligibility requirement of the Farm Property Class Tax Rate Program, the Application for Start-up Farming Business Income Exemption must be submitted with a completed Farm Property Class Tax Rate application. A copy of all submitted forms should also be kept by the applicant.

The Application for Start-up Farming Business Income Exemption is available online. Call 1-877-424-1300 or email farmtax.omafra@ontario.ca for more information.

Not a normal production year Farming Business Income Exemption

You may apply for this exemption if your usual annual gross farming income is $7,000 or more but the previous year was not a normal production year. You also had a valid Farm Business Registration Number that has recently been cancelled because your gross farming income fell below $7,000.

You will need to demonstrate why the gross income for the farming business was less than $7,000 and how the farming business will achieve an annual gross farming income of at least $7,000 in future years.

Call 1-877-424-1300 or email farmtax.omafra@ontario.ca to request the Not a normal Production Year farming business income exemption form.

Age/illness/death Farming Business Income Exemption

If, as a result of age or illness of the farming business owner or his/her spouse or same sex partner, or the death of the owner's spouse or same sex partner, the gross farming business income fell below $7,000 in the applicable year, the farming business owner may apply for this exemption. To be eligible for an exemption the following criteria must be met:

  • The farming business owner, owners spouse or same sex partner own the property and carry on the farming business.
  • The farming business owner, owners spouse or same sex partner operated the farming business for at least I0 years and were approved for the Farm Property Class Tax Rate Program during this time.
  • The farming business reported an annual gross farming income greater than zero to Canada Revenue Agency in the previous income tax year.

Call 1-877-424-1300 or email farmtax.omafra@ontario.ca to request the Age/illness/death farming business income exemption form.

FAQs

What income tax documents will I be required to submit?

The ministry may request a copy of the income tax forms you submitted to the Canada Revenue Agency that pertain to farming income declared in the previous income tax year.

How long will it take to process my income exemption application?

In most cases, income exemption applications will be processed within 30 business days of OMAFRA receiving all complete required documentation.

Will I be notified of the outcome of my income exemption application?

A written decision outlining the outcome of the application will be sent to all applicants by mail or email.

How long will my start-up exemption be valid for once it is approved?

A start-up income exemption may be approved for up to one year depending on the date of approval.

How long will my 'Not a normal production year' farming business income exemption be valid for, once it is approved?

A 'Not a Normal Production Year' farming business income exemption may be approved and valid for up to - and no more than - one year depending on the date of approval.

What should I do once I begin earning an annual gross farming business income of $7,000 or more?

Farming business owners are required to apply for a Farm Business Registration Number if they have generated a farming income of $7,000 or more in the previous income tax year. You can apply for a FBR number through Agricorp (1-866-327-3678).

Can I extend my start-up farming business income exemption if I was approved in the previous year?

If your start-up exemption has expired and your new farming business has not yet earned $7,000 of gross farming income, you may submit a new application for a start-up exemption. Note that you will be asked to update the information provided in your original exemption application, so applicants are encouraged to keep a copy of all information submitted. OMAFRA may also request a copy of your income tax records submitted to the Canada Revenue Agency.

I require a gross farm income exemption certificate in order to qualify for another provincial program. How do I get one?

If you require a farm income exemption certificate for a previously approved start-up income exemption, send your request by email to: farmtax.omafra@ontario.ca Include the name of the provincial program in your email.

Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA)
Farm Property Class Tax Rate Program
1 Stone Road West, 4th Floor
Guelph, Ontario N1G 4Y2
Phone: 1-877-424-1300 | Fax: 519-826-3170
www.ontario.ca/farmtax


For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca
Author: Manager, Agricultural and Rural Programs Unit, Rural Programs Branch/OMAFRA
Creation Date: 22 March 2017
Last Reviewed: 13 April 2017