Effective March 28, 2003, the provincial government announced that farmland transfers between farming family members would be exempt from land transfer tax.

Although it was proposed in the 2003 Ontario Budget to “provide relief for all farmers”, it became evident afterwards that amendments to Regulation 697 did not effectively address transfers to and from family farm corporations. Therefore, additional measures were proposed in the 2008 Ontario Budget: “To provide relief for all farmers, regulatory amendments will be proposed to expand the exemption to include transfers of farmland from family farm corporations to individual family members.”

However, Ministry of Finance officials have taken the position that the current wording of the regulation denies the land transfer tax exemption in situations where a family farm corporation was established prior to the farmland transfer because a family farm corporation is not an individual.

Consistent with the purpose and intent of this exemption, OFA continues to ask that the current ambiguous wording of regulation 697 be amended to clarify and specifically ensure farm families who established family farm corporations prior to the farmland transfer will benefit from this exemption as they pass down ownership of the family farm to the next generation.

OFA Position

OFA continues to advocate for the elimination of the land transfer tax on within-family farm sales.