Tax Bulletin LTT 1-2007, January 2007

• This bulletin provides highlights of changes to the family farm land transfer tax exemption to include transfers of farmed land from personal representatives of an estate as provided for in Regulation 697, R.R.O. 1990, and interim procedures for claiming the exemption.
• The changes are effective from March 28, 2003.
• For more information relating to the family farm exemption, including qualification criteria, refer to Tax Bulletin LTT 2-2004, Exemption for Certain Transfers of Farmed Land.
• The information in this bulletin does not replace the law found in the Land Transfer Tax Act (Act) and related regulations.

General

Introduction

Ordinarily, the transfer of farmed land is subject to land transfer tax.  There is, however, an exemption from land transfer tax available on the transfer of farmed land between individuals who are family members and on the transfer of farmed land from an individual(s) to a family-owned corporation.  This family farm exemption is available only where certain conditions are met.

The regulation providing for the family farm exemption has been amended.  The exemption now includes a conveyance of farmed land from the personal representative(s) of a deceased individual to an individual(s) who was a member of the family of the deceased individual.  A conveyance of land which would have qualified for the family farm exemption had it been made by the deceased individual immediately before death will be exempt if made by the personal representative(s) of the deceased individual, and all other requirements of the exemption are met.

Please note this change is effective March 28, 2003, coincident with the effective date of the expansion of the family farm exemption to include transfers between individuals.

Complete details regarding qualification criteria for the family farm exemption are contained in Tax Bulletin LTT 2-2004, Exemption for Certain Transfers of Farmed Land.

Procedures for Claiming Exemption – Transfer from Estate – Electronic Registration

Where the transfer of farmed land is from a personal representative of an estate the family farm exemption cannot be claimed electronically until changes to the electronic land registration system are complete.

Two options are available in the meantime:

1. Pay the tax at the time of electronic registration, and then apply for a refund.  (See "Procedures for Claiming Tax Refunds" below.)
2. Prior to electronic registration, provide the following documents to the Ministry of Revenue's Land and Resources Taxes section at the address below to obtain an endorsement to indicate that no land transfer tax is payable on registration:

• Two hard copies of the document to be submitted for registration.  The land transfer tax statements must be completed on the hard copies,
• A copy of the agreement of purchase and sale, and
• A properly completed, Affidavit Regarding the Exemption for the Conveyance or Disposition of Farmed Land.
   

Procedures for Claiming Exemption – Transfer from Estate – Other

The procedures for claiming the land transfer tax exemption in the case of paper registrations or for unregistered dispositions are unchanged.  Please refer to Tax Bulletin LTT 2-2004, Exemption for Certain Transfers of Farmed Land for details.

Procedures for Claiming Tax Refunds

With the changes to the family farm exemption, some persons may now be entitled to a refund on conveyances occurring on or after March 28, 2003.

If land transfer tax has been paid on a conveyance of farmed land and the conveyance meets the qualification criteria for the land transfer tax exemption, an application for a land transfer tax refund may be made within four years from the date on which the tax was paid.

The following documentation must be sent to the Land and Resources Taxes section:

• A copy of the registered instrument on which land transfer tax was paid (in the case of electronic registration, please include a copy of the docket summary which relates to the transaction),
• A copy of the agreement of purchase and sale, and
• A properly completed, Affidavit Regarding the Exemption for the Conveyance or Disposition of Farmed Land form, signed by all the transferees.
   

Additional Information

If this bulletin does not completely address your particular situation, refer to the Act and related regulations, or contact the:

Ministry of Revenue
Land and Resources Taxes Section
33 King Street West
PO Box 625
Oshawa ON  L1H 8H9 

Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
Fax: 905 433-5770
TTY (Teletypewriter): 1 800 263-7776

This bulletin and various other English and French tax materials published by the Ministry of Revenue may be obtained online at ontario.ca/revenue.

The Land Transfer Tax Act and Ontario's other public statutes and regulations may be obtained online at www.e-laws.gov.on.ca

© Queen's Printer for Ontario, 2007

ISBN 978-1-4249-2913-9