Real Estate Law
Purchase and Sale of Farm Properties
Real Estate Law
Purchase and Sale of Farm Properties
Many farm properties and businesses are available for purchase across all Canadian provinces. Government aid is also available for farmers who can create competitive businesses with sustainable agriculture. With income support policies and quota systems available, there is immense interest in the sale and purchase of farm properties.
Foreign farmers also have the advantage of bringing in their overseas agricultural experience and skillsets which can be merged with the Canadian farming techniques to generate very profitable farming businesses.
Nature and Scope of Farming and Agri-Business Services
Farm property is considered as prime real estate for both agribusinesses and developers equally. If you have identified any property for purchase or are planning to sell your farm property, it is always recommended to obtain the assistance of a Commercial Real Estate Lawyer. The Lawyer will be able to help you navigate the complex landscape of farming law and all government regulations associated with it. Independent legal advice can help you maintain and protect your legal interests.
The services we provide in the field of farm property sale and purchase include:
- Legal advice, drafting, and all support on the purchase and sale of farmland, farms, agribusiness, and its leases and agreements
- Legal advice, drafting, and all support on Land Tenure, farm, and agri-business organization
- All assistance and legal advice on farm and agri-business organizations including cooperatives, incorporations, and partnerships
- Legal advice, drafting, and support on commodity marketing law, supply contracts, crop insurance, biotechnology, and organics law
- Completion and closure of sale and purchase transactions of farm properties
- Family farm corporations and Leasing
- Tax planning and Succession planning
- Analyzing, negotiating, drafting, and finalizing agreements of sale and purchase, letters of intent, and all its amendments
- Legal advice on how to arrange finance for Vendor Take-Back Mortgages
- Post-closing occupancy agreements
- Farm Quota and Environmental issues
- Right of way and Easements
Dispute Resolution in Farming and Agri-Business
When you consult the Commercial Real Estate Lawyer for the sale or purchase transaction, do make sure that the Lawyer has vast experience in farm, agribusiness transactions, farm business operations, and disputes.
When legal disputes occur, the preferred modes of resolving them are outlined below:
- Intergenerational transfers of farm and farmland operations and estate planning
- Prioritizing the business and family needs equally by establishing corporations, trusts, and partnerships
- Farm family separation and divorce issues.
We can Help
At Nanda & Associate Lawyers, our experienced Real Estate lawyers understand your specific circumstances and provide tailored and customized solutions for each of them.
Our Mississauga Real Estate Lawyers are available for a consultation. Come and experience the quality legal counsel and personalized care we give to each client. We ensure prompt communication and a professional approach to achieve successful outcomes for you.
Frequently Asked Questions
How to purchase farmland in Ontario?
To purchase farmland in Ontario, you have to start with setting a budget and exploring various financing options, for instance, mortgages or farm loans. Next, you should connect with an experienced real estate lawyer who can conduct a thorough investigation of the farmland you have chosen.
By investigation, we mean performing title searches, ensuring legal compliance with the Planning Act, and checking the land’s zoning and its suitability as sustainable agricultural land. Overall, after you meet your financing approval, your real estate lawyer will handle due diligence, including environmental searches and closing documents.
Please note that foreign buyers may face restrictions under the Foreign Ownership of Land Regulations, so consult your real estate lawyer.
Are farms exempt from capital gains tax?
Yes, farmlands do experience exemptions when it comes to capital gains tax. In 2025, the federal government increased the Lifetime Capital Gains Exemption (LCGE) limit to $1.25M. This benefit allows any eligible farmer to avoid paying taxes on a certain portion of the capital gains incurred from selling their qualified farm and fishing property (QFFP). However, to qualify, you must meet the following criteria.
- The property must be qualified farmland.
- The seller must be a Canadian resident.
- The seller, spouse, or common-law partner must meet specific ownership and property use conditions.
A real estate lawyer can verify eligibility and ensure compliance with the rules of the Canada Revenue Agency. Any capital gains exceeding the LCGE exempt limit are taxable.
Is there inheritance tax on farmland in Canada?
In Canada, there is no inheritance tax on farmlands. However, before transferring its ownership, one should consider several tax consequences that follow with it. These are as follows:
- Deemed Disposition
- Lifetime Capital Gains Exemption
- Property Appraisal
- Gifts and Family Transfers
- Succession and Estate Planning
- Farm Equipment and Assets
Connect with our real estate lawyers to learn about the above-mentioned tax considerations in depth.
How many acres do you need to be considered a farm for tax purposes in Ontario?
In Ontario, there is no minimum acreage requirement for a property to be considered a farm for tax purposes. Agricorp’s Farm Property Class Tax Rate Program solely considers properties utilized for farming activities. The business must generate a gross annual farm income of at least $7,000.
If you want to ensure that your real estate is classified as farmland by the Municipal Property Assessment Corporation (MPAC), then you must consult a real estate lawyer to confirm that fact. If this is the case, you can save significant money by taxing your farmland up to 25% of the municipal residential rate.
Can you gift farmland in Canada?
In Ontario, gifting farmland at a fair market value is considered a sale. This sale would trigger capital gains tax. The Lifetime Capital Gains Exemption (LCGE) may offset tax on qualified farm property. Additionally, gifting the farm to a spouse or child may defer tax until they sell.
A real estate lawyer can use an estate freeze or trust for fair distribution and a 10-year capital gain reserve to minimize Alternative Minimum Tax (AMT). Our lawyers will ensure compliance with the Canada Revenue Agency and will focus on family law risks, such as the risk of gifted farmland losing its exclusion from marital asset division.
Are farm mortgages different?
The needs of agricultural lands are quite different than the residential ones. This causes farm mortgages to be drastically different from the traditional residential mortgages. Unlike home loans, farm loans require much larger down payments. These loans come with longer terms and more flexible repayment schedules. A home loan allows you to cover the price of the property, but a farm loan can be used for various things apart from just purchasing the land parcel. You can use it to upgrade the current infrastructure, purchase agricultural equipment, and cover any other associated costs.
