Ontario is expanding exemptions under the land transfer tax to include transfers of farmland from a family farm corporation to one or more family members.

As a result of the new exemption, a family transferring a farm valued at $500,000 would save $5,975 in land transfer tax (LTT), and a family transferring a farm valued at $1,000,000 would save approximately $13,475 in LTT.

The exemption complements existing LTT exemptions that apply when farmland is transferred from a family member into a family farm corporation, and when farms change ownership between members of the same family.

QUOTES

“We understand that farming families face unique challenges. This tax-relief measure will help families pass on the farming tradition to future generations and build a more sustainable agriculture industry,” said Finance Minister Dwight Duncan. “It is part of our commitment to building a stronger, more prosperous rural economy.”

“Ensuring the smooth succession of the family farm supports the continued participation of new generations of Ontario farmers and supports the prosperity of rural Ontario,” said Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs.

“This is great news for our local farmers, it means family farming traditions can continue to prosper and be passed on from generation to generation,” said MPP David Ramsay.

QUICK FACTS

§This measure was first announced in the 2008 Ontario Budget and, upon filing of the regulation, would take effect retroactively for qualifying farm transfers after March 25, 2008.

§Eligible family members include: spouse, child, mother, father, brother or sister and spouse/ descendants, aunts and uncles and their descendants. Grandparents, certain spouse’s relatives and a transferor’s same-sex spouse are also eligible family members. This is consistent with the current LTT exemptions for family farm transfers.