# Do I have to pay GST on purchase of a hobby farm?



## EmC (Dec 20, 2017)

We have purchased a property that was previously used as a hobby farm and are intending to use the property as our principal residence and to continue using it as a hobby farm. It is over 150 acres. We do not expect to make a living on the farm.

The farmland is not listed in the ALR but has farm status in BC.

Therefore, do we have to pay GST upon purchasing the property?
The previous owners are not GST registrants. We have a GST number but have done nothing more than register for one (never owned a business but had plans to kind of thing (not a farm though)).


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## EmC (Dec 20, 2017)

*Edit*

Property _is_ listed in ALR


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## OhGreatGuru (May 24, 2009)

This can be complex. You may need professional advice. See https://www.collinsbarrow.com/en/cb...rt-selling-your-farmland-gst-hst-implications for example. Or talk to some real estate agents experienced in selling farm land. Or your lawyer.

I'm pretty sure the entire 150 acres does not fall under the "principle residence" rule. Generally speaking the amount that can be included in "principle residence" is limited to one-half hectare, although there are exceptions. See IT-120R6 for example. I seem to recall you may need separate valuations for the part of the property that is "principle residence" and the rest of it; because the tax treatment is different, both at the time of buying and for future capital gains.

You will note that if you have GST number, you have to pay the GST to CRA. If you don't have one, the seller has to remit it.


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## AltaRed (Jun 8, 2009)

ALR in BC is complicated. Only a certain amount of land in the parcel can be principal residence and there are rules for setbacks, etc, etc. Definitely need an expert to sort it out OR take it to the Agricultural Land Commission to validate what can be done.


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