Navigating the HST rules for farmland sales in Ontario can be tricky. While generally taxable, exemptions exist for sales to related individuals, farming business transfers, and when a residence is included. To clarify your specific situation, consider requesting an advance ruling from the CRA. Contact Carson Law for expert guidance.
Selling farmland involves navigating complex Harmonized Sales Tax (HST) implications. When farmland includes a principal residence, the sale is treated as two separate transactions: the sale of the residence itself is not subject to HST, while the remaining acreage could be. If the land was used as a hobby farm, no HST applies to that portion. However, if the land has been leased to a third party for farming, the sale will be subject to HST, as leasing is considered a business activity. Understanding these nuances is essential, and consulting a tax professional is recommended for personalized guidance.
