Property Capital Gains Tax In British Columbia - Great For Farmers

December 9, 2004
By Srinidhi Goenka

British Columbia is Canada's third largest province. It has one of the highest credit ratings and the lowest ratios of tax-supported debt to GDP in Canada. The government is trying to attract new investments and create job opportunities through its tax policies. The property capital gains tax in British Columbia is quite liberal in nature, especially for farmers.

Farming Opportunities in British Columbia
The property capital gain tax in British Columbia allows farmers to avoid tax up to $500,000 of capital gains on the sale of farming property. This is a cumulative exemption which is allowed to a farmer in his/her lifetime after the year 1984. There are certain conditions, all of which need to be met in order to be eligible for this tax allowance.
The types of property which are eligible are :

1. Land and buildings used in farming by :
· the individual, his spouse, his parent or any of his children;
· a company, whose capital stock is a "share of the capital stock of a family farm corporation" of the individual, his spouse or any of his children
· by a partnership, an interest in which is an "interest in a family farm partnership" of the individual, his spouse or any of his children.

2. A "share of the capital stock of a family farm corporation"

3. An "interest in a family farm partnership" ; and

4. Quotas used in a farming business.

Land and buildings which were owned before June 18, 1987 are treated as farming property under this clause. If the property was acquired after this date, then there are additional clauses which have to be met. For a full time farmer, this is not a problem.

Overall, British Columbia provides great opportunity for investments in property, especially in farming. The new policies adopted by the government have lead to an increase in foreign investment over the past few years.