Tax Accountant for Farmland Investors in Ontario and Across Canada
You own the land. Someone else farms it. That one fact changes almost everything a general accountant will assume about your return. Your cash rent is most likely property income, not farming income, which decides what you can deduct and whether the land still qualifies for the farm capital gains exemption. You cannot claim capital cost allowance on land — only on tile drainage, fencing and buildings, so the split of your purchase price matters from day one. If you farm a little on the side, ITA section 31 can restrict those losses rather than let them offset your other income. And the exit is where the real money sits: qualified farm or fishing property, the ITA section 110.6 exemption, and the rollover to a child under subsections 73(3) and 70(9). AFFORDABLE flat fees, and we tell you what is a tax question and what is not.
AFFORDABLE Tax Accountant for Farmland Investors
Farmland investors get advice built for farmers, and the two are not the same file. A farmer has crops, machinery, inventory and a business. You have a parcel, a tenant and a long horizon. At Gondaliya CPA we start by settling the one question everything else follows from — whether your rent is property income or farming income — then build the file that question demands: the purchase price split between land and depreciable improvements, a cost base you can actually prove in twenty years, and a clear view of whether the parcel is on track to qualify as farm property when you eventually sell or pass it on. AFFORDABLE flat-fee support, no hourly billing.
We work with investors who rent to a neighbouring farmer, buyers of acreage near a growing town, families who inherited land and no longer farm it, retired farmers who now collect cash rent, corporations and family trusts holding parcels, and owners who have just been approached by a developer. Our page for farms covers the operating side — crops, livestock, machinery and programs. This page is for the owner who does not farm.
One line we draw plainly. We give no advice on whether farmland is a good investment, and none on severance, zoning or the Planning Act, which are legal questions. We also state no dollar figure for the lifetime capital gains exemption on this page, and the reason is in the FAQs below.
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Accounting That Understands Owning Land You Do Not Farm
Four things decide a farmland investor’s tax position, and a preparer who treats you as a farmer will get at least two of them wrong. At Gondaliya CPA we set them out plainly and say which questions belong to a lawyer rather than to us.
Stay Compliant and Keep the Exemption Available
On a farmland file the risk is rarely this year’s return. It is a characterisation or a records gap that sits quietly for fifteen years and then costs real money at the one moment you cannot fix it — the sale.
Accounting & Tax Experts for Farmland Investors
- AFFORDABLE + Registered CPA Firm
- Business and Corporate Tax Expert
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- Accounting, bookkeeping, and tax filing
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Why Choose Our Accounting Services for Farmland Investors?
Tax Planning — Before the Sale
We model the gain, test the farm property position and the rollover to a child well before a listing or an option agreement, because neither can be fixed at closing.
Consulting — The Price Allocation
We settle the split between bare land and depreciable improvements in the first month, with the evidence attached, because that number drives every year that follows.
CRA Representation — Characterisation
When CRA challenges your rent as farming income, your losses under section 31 or your gain as income rather than capital, we produce the lease and the evidence.
Bookkeeping — The Cost Base File
We keep the improvement and repair record your eventual sale depends on, so the cost base you claim is documented rather than estimated under pressure.
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Farmland Investor Clients
Farmland Investor Tax and Accounting Services in Ontario
Personal and Corporate Tax Filing
T1 or T2 preparation reporting your rental income from the land, with the correct statement, the right expense set and instalments where nothing is withheld.
Cash Rent and Crop Share Reporting
Rent reported as property income on Form T776, or as farming income where a crop share genuinely puts the risk on you, decided on the lease rather than by habit.
Purchase Price Allocation
The split between bare land and depreciable improvements settled at acquisition with evidence attached, because it drives your deductions and your eventual gain.
Restricted Farm Loss Review
Where you farm some of the land yourself, we test the ITA section 31 position before you file rather than after CRA restricts the loss for you.
Farm Property and Exemption Planning
Whether the parcel is on track to be qualified farm or fishing property for ITA section 110.6, reviewed years ahead while the position can still be improved.
Transfer to a Child and Succession
The rollover under ITA subsection 73(3) during life and subsection 70(9) on death, with the elected amount chosen deliberately rather than by default.
Corporate and Trust Ownership
Whether the land belongs in a corporation, a trust or your own name, modelled on your numbers, with the small business deduction and $500,000 limit tracked.
GST/HST on Rent and Sale
The registration position on cash rent and the taxable supply question on an eventual farmland sale, checked before closing rather than discovered at it.
Non-Resident Landowner Filings
Part XIII withholding at 25% on rent remitted with an NR4, or a section 216 return to be taxed on net rental income instead, with clearance on a sale.
Catch-Up Filing for Landowners
File overdue years on rental income you never reported, rebuild the cost base from source documents, and get back into CRA compliance without drama.
CRA Audit Resolution
Expert support on rental income, restricted farm loss, capital versus income and farm property reviews, handled with confidence from the first letter.
Voluntary Disclosure Program
Come forward on unreported cash rent, missed Form T1135 filings or unfiled years, cancelling penalties through a Voluntary Disclosures Program application.
Accounting & Tax Services Tailored for Farmland Investors
Real, practitioner-level CPA expertise for investors renting to a neighbouring farmer, buyers of acreage near a growing town, families holding inherited land, retired farmers now collecting cash rent, corporations and trusts holding parcels, and owners a developer has just called.
- We prepare your T1 or your corporation’s T2 reporting the income from the land, with the characterisation settled first because every deduction on the return depends on which side of that line you sit.
- We report cash rent on Form T776 as property income in the ordinary case, with the expense set that property income actually permits rather than the broader set a farming business would claim.
- We set instalments where no tax is withheld at source, which is the normal position for an investor whose only income from the parcel is a cheque once or twice a year from a tenant.
- We claim capital cost allowance on the depreciable improvements alone, never on the land, and we keep the undepreciated balances tracked by class so a later sale is computed rather than guessed at.
- We keep the six years of records ITA section 230 requires, and on a land file we keep the acquisition documents indefinitely because the cost base question outlives any retention rule.
- We read the actual lease before deciding anything, because the characterisation of your income turns on what the agreement makes you responsible for rather than on what the arrangement is called.
- Straight cash rent, where the tenant takes the crop risk and pays you a fixed amount, is generally property income reported on Form T776 and is not farming income no matter how agricultural it feels.
- A crop share can land on either side. Where you genuinely bear production risk and share in inputs, it can be farming income on Form T2042; where you simply take a slice of proceeds, usually not.
- The distinction is not academic. It reaches which expenses you may deduct, whether anything is active business income, and whether the land is being used in a farming business for exemption purposes.
- We document the conclusion and the reasoning at the time, so a CRA review years later is answered with a contemporaneous analysis rather than a reconstruction built after the question arrives.
- We split the purchase price between bare land and depreciable improvements at acquisition, using the appraisal, the municipal assessment breakdown and the agreement of purchase and sale as evidence.
- This is the single most valuable hour on a new farmland file, because land attracts no capital cost allowance at all while tile drainage, fencing and buildings do, each in its own class.
- Nobody can rebuild the allocation credibly ten years later. An investor who never did it either claims nothing on real depreciable assets or claims something they cannot support on review.
- We separate capital improvements that add to your cost base from repairs that are deducted in the year, and we keep that split as a running file rather than a year-end scramble.
- On inherited land we establish the cost base from the deceased’s final return and the valuation used there, which is frequently the only figure that stands between you and an arbitrary assessment.
- Where you farm part of the land yourself alongside a job or a business, ITA section 31 can restrict the farm loss instead of letting it reduce your other income, and the surprise is always unwelcome.
- The test is whether farming is your chief source of income, judged on the whole picture rather than on a single year’s numbers, and an investor with a salary rarely satisfies it.
- The restricted portion is not lost. It carries forward to be used against farming income in a later year, which matters if the operation is genuinely building toward something.
- We test the position before the return is filed rather than after a reassessment, because the planning options are real while the year is open and almost nil once it has closed.
- Where the activity is genuinely commercial we document the evidence for that, since the difference between a restricted loss and a denied loss is the quality of the file behind it.
- We review whether the parcel is on track to be qualified farm or fishing property for the lifetime capital gains exemption in ITA section 110.6, which is the biggest single number on most of these files.
- Eligibility turns on how long the property has been owned and on a “used principally in the business of farming” test, and both are applied to that specific parcel with its specific history.
- We will not tell you on a web page that your land qualifies. We will tell you what the test looks at, what in your history helps or hurts, and what could still be changed while there is time.
- Cash renting to a third party is exactly where this gets delicate, because the question becomes whose farming business the land is being used in and the answer depends on the period and the facts.
- We state no dollar amount for the exemption anywhere on this page, deliberately, and the reason is set out openly in the FAQs below rather than buried or quietly left out.
- Farm property can transfer to a child at an elected amount under ITA subsection 73(3) during your lifetime, deferring the gain rather than triggering it, where the statutory conditions are met.
- The same deferral is available on death under ITA subsection 70(9), which is why a will drafted without reference to the farm parcels can cost a family far more than the drafting ever saved.
- The elected amount is a decision, not a default. Choosing it deliberately can use up an exemption now, shelter a gain later, or step the cost base up for the child, depending on the family’s position.
- We model the outcomes across the family rather than for one taxpayer, because a rollover that is optimal for you and punitive for your child is not a plan, it is a deferral of an argument.
- We work alongside the lawyer drafting the will or the transfer, since the tax result follows the legal structure and an accountant designing that structure alone gets both halves wrong.
- We model whether a parcel belongs in a corporation, a family trust or your own name on your actual numbers, because the right answer differs sharply between a rented parcel and a development hold.
- Rental income in a corporation is often not active business income, so the small business deduction under ITA section 125 and its $500,000 limit may not apply the way an owner expects.
- We flag the serious cost of getting this wrong in the other direction: land already held personally cannot be moved into a company without triggering tax unless a rollover genuinely applies.
- Where the land is co-owned we settle whether it is a partnership or a co-ownership, which determines whether a partnership information return is required and how each owner reports.
- We keep the associated corporation picture current across the family, since families holding several parcels in several companies routinely share a single limit none of them realised they were sharing.
- The sale of farmland is generally a taxable supply for GST/HST purposes, with specific exceptions, and that single sentence has derailed more farmland closings than any other tax point.
- We check the registration and self-assessment position before a sale rather than after it, because the obligation lands at closing and the agreement rarely allocates it the way either party assumed.
- Cash rent of farmland is generally taxable where the landlord is registered, so we settle whether you should be registered at all and what that means for the rent you charge your tenant.
- Where you are registered we claim the input tax credits available on land improvements and professional fees, which on a drainage or fencing project is a meaningful recovery most owners miss.
- We coordinate with the lawyer on the closing documents, because the certificate and the allocation in the agreement are legal instruments and the tax outcome depends on getting them right.
- Rent paid to a non-resident owner attracts Part XIII withholding at 25% under ITA section 212, which the payer is required to withhold and remit, reported on an NR4 slip.
- A section 216 return can be filed instead to be taxed on net rental income after expenses, which for a parcel with real costs frequently produces a materially better result than the flat withholding.
- We prepare the undertaking and the return on the right timetable, because the election is time-sensitive and missing the window leaves the gross withholding as the final answer for that year.
- Ontario farmland is taxable Canadian property, so a disposition by a non-resident brings a clearance certificate process that must be started before closing rather than after the money moves.
- We coordinate with the purchaser’s lawyer on the holdback, since a closing that ignores the certificate requirement leaves funds trapped and both sides exposed for longer than anyone wants.
- We reconstruct unfiled years from deposit records, lease agreements, tenant statements and municipal tax bills, rebuilding the six years of records ITA section 230 requires from source documents.
- Late filing costs 5% of the balance owing plus 1% per month up to twelve months, so we file the oldest unfiled year first to stop the penalty compounding and limit the arrears interest CRA charges.
- Unreported cash rent is the single most common finding on these files, usually because the owner treated an annual cheque from a neighbour as something other than income from property.
- We rebuild the cost base and the depreciable improvement history at the same time, since a catch-up that fixes the income but leaves the cost base undocumented has solved only half the problem.
- We bring the position forward on Form RC199 before CRA contacts you, confirming the disclosure is genuinely voluntary, which is the single condition that makes the application valid at all.
- When CRA recharacterises your cash rent as farming income or the reverse, we produce the lease, the risk allocation in it and the contemporaneous analysis that supported the filing position.
- When CRA restricts a farm loss under ITA section 31, we produce the evidence on chief source of income and the commercial character of the activity across the years rather than for the one under review.
- When CRA treats a sale as income rather than capital, we produce the acquisition-era evidence of intention, which is why we insist on documenting why a parcel was bought at the time it was bought.
- When the farm property position on a sale is questioned, we produce the ownership and use history parcel by parcel, since that is the only material the test can actually be applied to.
- We file the Notice of Objection within 90 days of a reassessment and pursue taxpayer relief on Form RC4288, cancelling penalties and interest where a prior preparer’s error caused them.
- We bring you forward on unreported cash rent, unfiled years and missed Form T1135 filings on foreign farmland, which on these files is usually a specific stretch of years rather than a lifetime.
- We file on Form RC199 with a full reconstruction from leases, deposits and municipal records, so you are not left facing an arbitrary CRA assessment built on estimates nobody can defend.
- We confirm your disclosure is genuinely voluntary before CRA contacts you — the single condition that makes it valid — and secure roughly 50% interest relief on the older years.
- We often find the corrected years produce less tax than feared, because the expenses, the property tax and the depreciable improvements were available throughout and had never been claimed.
- We fix the going-forward position in the same engagement, since a disclosure that cleans up the past and leaves the same characterisation error in place simply rebuilds the problem.
Farmland Investor Tax Check
Six quick questions on your income characterisation, your price allocation, your cost base file, your farm property position, your succession plan and your GST/HST position. No fee shown.
1. Do you know whether your rent is property income or farming income?
2. Was your purchase price split between land and depreciable improvements?
3. Do you keep a record of capital improvements separate from repairs?
4. Has anyone reviewed whether the parcel qualifies as farm property?
5. Is there a plan for passing the land to the next generation?
6. Do you know your GST/HST position on the rent and on an eventual sale?
Free CPA Consultation for Farmland Investors
Case Studies: Farmland Investors
Guelph Investor — Ten Years of CCA on Land
The problem: A Guelph professional had bought a hundred-acre parcel and rented it to a neighbouring farmer for cash rent. Her previous preparer had treated the whole purchase price as a depreciable asset and claimed capital cost allowance on it for ten years, which is simply not available on land. There was no allocation between land and the tile drainage and fencing that genuinely were depreciable, and no record of the drainage project she had paid for in year three.
What we did: We rebuilt the allocation from the original appraisal and the municipal assessment breakdown, established the correct undepreciated balances for the improvements that actually qualified, and corrected the open years through T1 adjustment requests. We brought the years beyond that forward voluntarily and documented the drainage project as a capital improvement adding to her cost base.
The result:
- Incorrect CCA on land corrected before CRA found it
- Real depreciable improvements identified and claimed properly
- Cost base documented, including the drainage project
Windsor Family — Inherited Land, No Cost Base
The problem: Three siblings inherited farmland near Windsor and rented it out. None of them farmed. They had never filed anything for the rental income, believing that because the land came from their father there was nothing to report. Nobody had established a cost base from the father’s final return, nobody knew whether the parcel had been qualified farm property in his hands, and a developer had just made an approach.
What we did: We established the cost base from the valuation used on the deceased’s final return, settled whether the three held a co-ownership or a partnership and filed accordingly, reported the rental income for the open years and disclosed the earlier ones on Form RC199. We then reviewed the farm property position before the developer conversation went any further.
The result:
- Cost base established from the estate’s own filed valuation
- Unreported rent disclosed voluntarily with penalties cancelled
- Farm property position reviewed before any sale was negotiated
Ottawa Owner — A Side Operation and a Restricted Loss
The problem: An Ottawa software manager had bought acreage, rented most of it out and farmed a small section himself, running a loss on the farming portion every year. He had been deducting that loss in full against his salary. Nobody had mentioned ITA section 31 to him, and three years of returns had been filed on the assumption that a farm loss is simply a loss. He was also unregistered for GST/HST while charging cash rent.
What we did: We tested the chief source of income position honestly and concluded the restriction applied, quantified the carry-forward, and corrected the filings before a reassessment arrived rather than after. We settled his GST/HST registration position on the rent and documented the commercial evidence for the farming activity going forward.
The result:
- Section 31 restriction applied correctly with the carry-forward tracked
- Returns corrected proactively instead of under reassessment
- GST/HST registration position on the rent finally settled
Our clear, efficient process ensures every step is transparent, building trust and long-term client relationships.
Kickoff (Document Request)
Collect the agreement of purchase and sale, any appraisal, the municipal assessment, every lease or crop share agreement, improvement invoices, prior returns and the estate valuation where inherited.
First 30 Days (Two Records)
Settle the income characterisation on the lease, and build the purchase price allocation between land and depreciable improvements with its evidence attached.
Position Review
Test the farm property position for ITA section 110.6, the restricted farm loss exposure under section 31, and the GST/HST registration position on the rent.
Annual Planning Review
Cost base file updated, succession and rollover options revisited, and the sale or developer scenario modelled while the options are still open.
Year-End Close & Filing
T1 or T2 with the rental statement, capital cost allowance on improvements only, Form T1135 where required, instalments set, and CRA correspondence handled.
Get Your Farmland Tax Position Reviewed Today
Affordable Pricing for Farmland Investors
We believe in clear, upfront pricing so you know exactly what to expect. All fees include HST.
- Tax Preparation (Corporation) — From $400
- Tax Return Filing (Corporation) — From $400
- Tax Compliance Audit — FREE CRA audit support for our clients
- Tax Strategy — FREE for our clients
- Accounting Base Plan — From $100 per month
- Bookkeeping Management — Free for our Accounting clients
- Financial Reporting — Free for our Accounting clients
- Business Formation — Flat $35
- Incorporation Process — Flat $35
- Entity Setup Assistance — Flat $35
- Full-Service Payroll — From $125 per month
Payment is by Interac e-Transfer to info@gondaliyacpa.ca only. Security question: Not Applicable, as auto-deposit is enabled.
Meet Your Lead Accountant
Meet your lead accountant. As your personal and property tax adviser, you deal with the same two people every year.
What Our Clients Say
1300+ five-star reviews from farmland investors, landowners and property investors across Ontario and Canada.
Serving Farmland Investors Across Ontario
Our CPA team provides specialized accounting and tax solutions for farmland investors across Ontario. We understand why cash rent is usually property income rather than farming income, why no capital cost allowance is available on land itself, why ITA section 31 restricts farm losses for an owner whose chief source of income is elsewhere, and why the qualified farm property position and the rollover to a child have to be planned years before a sale.
Toronto (ON)
55 Queen St E Ste 1205, Toronto, ON M5C 1R6, Canada
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Mississauga (ON)
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Brampton (ON)
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Scarborough (ON)
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Vaughan (ON)
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Oshawa (ON)
210 Durham St, Oshawa, ON L1J 5R3, Canada
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Ottawa (ON)
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Etobicoke (ON)
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Hamilton (ON)
70 Starling Dr, Hamilton, ON L9A 0C5, Canada
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Guelph (ON)
1155 Gordon St, Guelph, ON N1L 1S8, Canada
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Windsor (ON)
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North York (ON)
150 Graydon Hall Dr #912, North York, ON M3A 3B2, Canada
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Farmland Investor Accounting & Tax FAQs
Related Industries We Serve
Accountant for Farms
- The operating farm business
- Crops, livestock and machinery
- Farming income on Form T2042
Accountant for House Flippers
- Capital versus income on property
- Adventure in the nature of trade
- GST/HST on resale property
Accountant for Real Estate Syndicators
- Co-ownership and partnership reporting
- Investor allocations and statements
- Structuring a property holding
Accountant for Foreign Investors in Canadian Real Estate
- Part XIII withholding and NR4
- Section 216 rental returns
- Clearance certificates on sale
Farmland Investment Tax Done Right.
Built for the owner who does not farm. Your cash rent characterised properly as property income on Form T776 rather than farming income, because that one decision reaches your deductions, your active business income and your exemption position. Capital cost allowance claimed on tile drainage, fencing and buildings — never on the land — off a purchase price allocation built at acquisition with evidence attached. The ITA section 31 restricted farm loss tested before you file. The exit planned years ahead: qualified farm or fishing property, the ITA section 110.6 exemption, and the rollover to a child under subsections 73(3) and 70(9) with the elected amount chosen deliberately. Plus the GST/HST position on rent and sale settled before closing, and non-resident withholding or a section 216 return where it applies. AFFORDABLE flat fees, no hourly billing. Licensed CPA Ontario. 1300+ five-star reviews. 30-Day Money-Back Guarantee.