purchasing agricultural property

[gdurham]

I am thinking of purchasing some agricultural property out in the country. Nothing big, maybe 150 acres or so, depending on where I am looking. I know about as much about farming as I do about rocket science, which is about sweet fuck all. Actually I know a little about farming, but not much.

If I do this it will be an investment, with perhaps a 10-15 year horizon. I have heard that ag. land is often rented to farmers for crops--but generally this is only enough to cover property taxes.

does anyone have any expierience in this kind of thing? Any wisdom to share? I am interested in the rental revenue--is it true that it only covers teh tax bill?

thanks!

 

[Gentle Ben]

I think you have pretty much accurate info, a friend rented some land for many years for corn and soya, he said rent covered basically the taxes on that portion of land.

 

[C Dick]

Be careful where you buy, some land is covered by the Green Belt, by Escarpment protection, Oak Ridges Moraine, etc. That land would be cheaper, but you would be less likely to be allowed to develop it later. Also be aware of what town it is in, some towns are much more efficient than others.

 

[Terbevore]

Go East Young man........

I helped a friend pick out some farmland in the Picton area in Prince Edward County (South of Belleville). There is some great land there and the rules are not too restrictive. However, you must know the rules before you buy to avoid surprises. For example, you cannot start building a house on a property unless you have a functioning well. Take a drive and look around. In years to come, the Picton area will be very popular and I can only see property values rising.

 

[l69norm]

I think you have pretty much accurate info, a friend rented some land for many years for corn and soya, he said rent covered basically the taxes on that portion of land.

Are there other tax advantages as well?

I thought if you lived on the farm property, there were some tax breaks as long as it was being used as a working farm (vs. hobby farm)

So could you live in the farm house/yard, rent the remaining land to a nearby farmer and claim "farm expenses" against your income?

As well, what about farm gas, farm trucks, etc?

 

[Gentle Ben]

Are there other tax advantages as well?

I thought if you lived on the farm property, there were some tax breaks as long as it was being used as a working farm (vs. hobby farm)

So could you live in the farm house/yard, rent the remaining land to a nearby farmer and claim "farm expenses" against your income?

As well, what about farm gas, farm trucks, etc?

My friend didnt farm the land, he merely rented out some of his land to a farmer, I doubt that qualified my friend for farm benifets , his comments when he was renting out,, " hardley worth renting" so I don't think it was very prosperous

 

[red]

what if you planted trees? made it a tree farm- can't be too hard.

 

[danmand]

If you rent out your farm land, and the renter is a qualified full time farmer,
you get "farm land property tax" rate which is a considerable discount to regular
property tax.

If you do any farming yourself as a "hobby" farmer,
you can claim a deduction of half of your expenses
up to around $8,000. That is if you have some
expectation of making a profit within 7 years.

 

[Never Compromised]

What ever you do, make sure you set aside a small patch of land near the crops for a bee farmer. A friend of mine has 100 acres that he rents to farmer A who does corn, and farmer B does bees. Farmer B pays in 5% of the honey harvest.

If you are looking at wells, be aware that septic systems have very specific regulations, and that you need larger systems for more bedrooms. If you have water problems, you might want to consider a composting toilet system.