If you would like to apply for a farm classification and lease all or part of your land to a farmer, please complete a general application for a farm classification, including the “Lease Information” section. Rental costs are not considered farm income. Land leased to a farmer must make an appropriate contribution to the farm. The amount of the lease paid by the lessee is not considered eligible income for the purposes of classifying agricultural operations. Land leased to a farmer may be eligible for the agricultural class if: A change in use is to be expected and the agreement is not necessarily disqualified when a notice of termination has been given. The law does not specify how far diversification can go. In the meantime, however, it has become clear that peripheral or additional commercial activities do not prevent a rental from being an agricultural lease, for example the operation of a farm store or campsite. In any case, any diversification of use outside agriculture is likely to require the consent of the owner. The lease document must include the names and signatures of the tenant (farmer) and lessor (owner), the legal or other well-defined description of the land to be rented, the start date, the date of signature, the duration of the lease, the size of the leased area, the amount of compensation paid for the lease and the intended use of the leased land.
For this purpose, the rental form can be used. A copy of an ongoing lease must be submitted to the appraiser. To ensure that the information is kept up to date, a new lease is required after expiration and a current lease is required every seven years. The lease or lease amount paid by the tenant – farmer to the landowner is not considered eligible income for the purposes of the classification of the operation. If an owner leases the land to a farmer under a crop-sharing agreement, the farmland is eligible for the agricultural class, but the land under a residence is not eligible for the agricultural class unless the resident is involved in the day-to-day operations of the farm (i.e., it is a farmer`s home). Other considerations that should be taken into account in the lease agreement are: Section 73 of the Land Titles Act considers leases on a portion of a property for more than three years or that have the option of extending beyond three years as subdivisions. Therefore, before registering a lease, the subdivision process must be followed and approval must be granted by the approval officer. The licensing agent depends on where the property is located. For example, rural subdivisions located in regional district districts must obtain approval from the Department of Transportation and Highways through the Regional District or the Islands Trust. If the property is on the Farmland Reserve (LRA), a Subdivision Permit from the Farmland Board is required. Most Crown land leased or authorized for farming or grazing is taxable and taxable. However, areas subject to grazing or permits issued under the Rangelands Act are not taxable.
Taxable land is classified as a farm only if the tenant or licensee who is treated as the owner of Crown land applies for an agricultural class. If the auditor is satisfied that the farm meets the legal and regulatory requirements, he or she may classify all or part of the land as an agricultural holding. The general application for farm classification is also available in your local assessment region in British Columbia. Please submit your application by the 31st. October to your local office in the BC Assessment Area to ensure that the correct information is on the following year`s Assessment Notice. “Who” – are the parties involved in the rental agreement and consist of a lessor and a tenant. “What” – is an interest in land that gives a person all the rights to use and operate a landowner`s property (or part of the property) in exchange for rent paid to the landowner “Where” – an official description of the leased property. “When” – describes the specified period of time covered by the agreement. “How” – describes the type of payment terms, offers security to both parties and can be registered with land titles. Where land is leased to a farmer who manages other land, the entire holding of the lessee shall cover the income needs from the sale of qualified agricultural products on the basis of the area of all the land that makes up that holding. Is it your dream to operate a vineyard, an orchard or other agricultural activities? Cher Wood, CPA, CGA has extensive knowledge of running a vineyard or performing other agricultural activities in B.C.
As a former vineyard owner, Cher is familiar with the day-to-day operations and challenges you face when managing your own farms or considering a land lease agreement. When you combine this with their in-depth accounting knowledge, having them in your corner is a real benefit to your success. To be eligible for the operating class, land leased to a farmer must make an appropriate contribution to the farm. The Class of Agricultural Operations Ordinance sets out the information that must be included in the lease when land is leased to a farmer and what must be made available to the appraiser by October 31 so that the land can be classified as an agricultural operation: the issue is even more complicated with respect to the GST/HST, where the definition of partial lease is “a system of agricultural production, in which arable land is provided by lease, license or similar agreement with a tenant who manages the land in exchange for a portion of the crop grown on the land. “If the use of the land is provided in exchange for a portion of the harvest, the supply of the land is considered a `zero rate` and the GST/HST does not have to be collected by the landowner. However, if the payment for the use of the land is not a portion of the crop, but a fixed amount in cash, the delivery of the land to the tenant is subject to GST/HST. Agriculture includes all types of farms, from those that grow cereals in the fields (including grass, hay or silage), to those where the plants are grown in an orchard or under glass (for example. B rhubarb or mushrooms), to those where the “harvest” is an animal (for example. B, lamb farming) or a product derived from animals (e.g.B. milk). Animal breeding (e.B horse grazing in the countryside) is not an agricultural business in itself, but horse breeding.
A garden center is not an agricultural business, but the cultivation of plants is. Applications for classes of farms and all applicable leases must be submitted to the British Columbia Assessment Authority by October 31 so that the assessment for the following taxation year can be adjusted. Minimum income requirements must be met during at least one of the two relevant reporting periods and a sale of an eligible farm product must occur during each reporting period. Other considerations between the lessor and the lessee relate to matters in which, in accordance with the terms of the agreement, the lessor influences decisions concerning production, cultivation, the quality and condition of the land, the use of fertilizers and chemicals, crop insurance coverage, the delivery and sale of products, and the manner in which government payments and subsidies are requested and distributed; is granted. . . .