Farmland Easement Agreements are the strongest tool available to farmland owners who want to protect their land forever. Farm families can partner with the Ontario Farmland Trust (OFT) to establish easement agreements that ensure their farmland will never be converted to urban development or other non-agricultural uses, while maintaining full ownership of their property.
The following outlines the key things you should know about farmland easement agreements. Click on each topic for more details or scroll down for more information on the tax benefits and financial considerations. You can also download our Farmland Easement Agreements fact sheet.
A Farmland Easement Agreement:
Tax Benefits and Financial Considerations
Farmland owners can receive tax benefits by entering into a Farmland Easement Agreement with OFT. Such benefits are intended to make farmland preservation achievable and affordable for farmland owners who choose to make this part of their legacy.
Farmland owners are compensated with a charitable tax receipt from OFT for the difference between the property’s fair market value before the easement is in place, and the fair market value after the easement has been registered, as determined by a qualified appraiser. The easement value is treated as a charitable donation to OFT.
Also, if your farm includes significant natural features like a forest or wetland, your easement donation could qualify for enhanced tax benefits through Environment and Climate Change Canada’s Ecological Gifts Program.
The timing of the easement registration and, therefore, the triggering of tax advantages can be an important factor to consider. In many cases, the tax benefits can be significant. It is strongly recommended that farmland owners seek legal and financial advice to fully understand the financial impact of an easement donation, and how to maximize the benefits for you and your family.
The decision to protect your farm through a Farmland Easement Agreement can be complex.
Our Frequently Asked Questions page addresses some of our most common questions about Farmland Easement Agreements.
You can also contact us at any time with your questions or to further discuss protecting your farm.