Farm Rollover Calculator 2026 Ontario: Your Exact Number by Income, Age, and Province
Quick Answer
A $750,000 Ontario farm with a $200,000 adjusted cost base carries a $550,000 embedded capital gain. Without the intergenerational farm rollover, deemed disposition at death triggers roughly $147,000 in combined income tax at Ontario’s top rate — before the LCGE. With the rollover under ITA s. 70(9), the farm transfers to a qualifying child at the deceased’s ACB: $0 capital gains tax. The child inherits the $200,000 cost base and faces the deferred gain on their eventual sale. Add a $150,000 RRIF with no surviving spouse and Ontario probate on a $1M estate, and the total estate cost drops from roughly $210,000 (no rollover) to $87,000 (full rollover) — a $123,000 difference controlled entirely by whether the child qualifies and the executor files correctly. The calculator below computes your exact number.
Key Takeaways
- 1The intergenerational farm rollover under ITA s. 70(9) allows qualified farm property to transfer to a child or grandchild at any amount between the deceased’s ACB and FMV. At full rollover (transfer at ACB), the capital gain is eliminated entirely on the terminal return. The child inherits the parent’s cost base and will face the deferred gain on their own eventual disposition.
- 2Three conditions must all be met for the s. 70(9) rollover: (1) the property is “qualified farm property” — used principally in farming in Canada by the deceased, spouse, or child in at least two years before death; (2) it transfers to a child, grandchild, or great-grandchild of the deceased; (3) the child was resident in Canada immediately before the transfer. “Child” includes adopted children and children of a spouse or common-law partner.
- 3The Lifetime Capital Gains Exemption (LCGE) for qualified farm property is approximately $1,250,000 in 2026 (indexed annually). A partial rollover strategy — transferring the farm at ACB + an amount sheltered by LCGE — lets the estate use unused LCGE to step up the child’s cost base at zero net tax. This reduces the child’s future tax bill without increasing the estate’s current bill.
- 4The capital gains inclusion rate in 2026 is a flat 50% for all taxpayers. The proposed June 2024 increase to 66.67% above $250,000 was cancelled March 21, 2025. Source: PMO release March 21, 2025; ITA s. 38(a).
- 5Ontario’s Estate Administration Tax (probate) is $0 on the first $50,000, then $15 per $1,000 above that — effectively 1.5% on everything over $50K. On a $1M farm estate: $14,250. Alberta’s maximum probate fee is $525 regardless of estate size. Source: Ontario Estate Administration Tax Act; Alberta Surrogate Rules.
The Scenario: $750K Ontario Farm, One Child Who Farms It
A 71-year-old southwestern Ontario farmer dies in 2026. Estate composition: a $750,000 farm property (land plus buildings, purchased decades ago for $200,000), a $150,000 RRIF, and $100,000 in savings. One adult child has been actively farming the property for the past 15 years. No surviving spouse. For the full framework on how Canada taxes estates at death, see our inheritance tax Canada 2026 complete guide.
The executor's first question: does the farm qualify for the intergenerational rollover under ITA s. 70(9)? If yes, the $550,000 embedded gain ($750K − $200K) can transfer to the child at the parent's cost base — $0 capital gains tax on the terminal return. If no, deemed disposition at fair market value produces roughly $147,000 in tax at Ontario's top combined rate of 53.53%. That's before the RRIF income tax and probate.
Calculator: Your Farm Rollover Numbers
Adjust the sliders below to match your estate. The calculator compares three scenarios: no rollover (deemed disposition at FMV), full rollover to a farming child, and a partial rollover that uses the LCGE to step up the child's cost base. All figures use 2026 federal + provincial rates.
Farm Rollover Calculator — 2026 Rates
Adjust inputs to match your estate. Compares three scenarios: no rollover (deemed disposition at FMV), full rollover to a farming child (ITA s. 70(9)), and partial rollover using LCGE.
Embedded farm gain: $550,000 | Total estate: $1,000,000 | Available LCGE: $1,250,000
A: No Rollover (Deemed Disposition)
Farm sold at FMV on terminal return. LCGE applied if available.
B: Full Rollover to Child (s. 70(9))
Farm transfers at ACB. Zero capital gain. Child inherits ACB.
C: Partial Rollover + LCGE
Transfer at $750,000 to use LCGE, child inherits stepped-up ACB.
Full rollover saves $0 vs no rollover on this estate.
The child inherits the farm at your ACB of $200,000. Their future sale triggers the deferred gain. Scenario C steps up the child's ACB to $750,000, reducing their future tax — worth considering if your LCGE is available and the child may sell within 10 years.
Estimates use simplified combined federal + provincial brackets. Actual tax depends on full return details. Consult your estate lawyer and tax accountant for binding numbers. Rates: 2026 ITA, Ontario Estate Administration Tax Act.
How the Intergenerational Farm Rollover Works
When a Canadian farmer dies, CRA treats them as having sold all capital property at fair market value immediately before death — the deemed disposition under ITA s. 70(5). On a farm with decades of appreciation, this triggers a large capital gain on the terminal return. The capital gains inclusion rate in 2026 is a flat 50% (the proposed increase to 66.67% above $250K was cancelled March 21, 2025).
ITA s. 70(9) overrides the deemed disposition for qualified farm property passing to a child. Instead of transferring at FMV, the executor can elect any amount between the deceased's adjusted cost base and FMV. At full rollover (transfer at ACB), the capital gain is zero. The child inherits the parent's cost base and carries the deferred gain.
The Three Conditions Executors Get Wrong
The rollover requires all three: (1) the property was used principally in farming by the deceased, their spouse, or their child for at least two years before death; (2) the recipient is a child, grandchild, or great-grandchild; (3) the child was a Canadian resident immediately before the transfer. Miss any one of these and the rollover is denied — the full $550,000 gain hits the terminal return. CRA audits farm rollovers more aggressively than most provisions. Document the farming use thoroughly.
Worked Example: Three Scenarios on a $750K Farm
Scenario A: No Rollover (Deemed Disposition at FMV)
| Component | Amount | Tax |
|---|---|---|
| Farm capital gain ($550K × 50% inclusion) | $275,000 taxable | ~$112,000 |
| RRIF deemed income (no spouse) | $150,000 | ~$51,000 |
| Ontario probate (EAT on $1M estate) | $1,000,000 | $14,250 |
| Total estate cost | ~$177,250 |
Assumes no LCGE available. If the deceased had unused LCGE, up to $275,000 of taxable gain is sheltered, reducing farm tax to $0 — but the RRIF and probate still apply.
Scenario B: Full Rollover to Farming Child (s. 70(9))
| Component | Amount | Tax |
|---|---|---|
| Farm (rolled at ACB, $0 gain) | $0 | $0 |
| RRIF deemed income (no spouse) | $150,000 | ~$42,000 |
| Ontario probate (EAT on $1M) | $1,000,000 | $14,250 |
| Total estate cost | ~$56,250 |
RRIF tax is lower here because the $150K is no longer stacked on top of $275K of farm gain — it's the primary income, taxed at lower blended rates. The rollover doesn't just eliminate farm tax; it reduces the rate on everything else on the return.
The Rollover Saved $121,000
Total estate cost without rollover: ~$177,250. With full rollover: ~$56,250. Difference: ~$121,000. The child inherits the farm at the parent's ACB of $200,000. Their future sale of the farm at $750,000+ triggers the deferred gain — but that's their future tax problem, not the estate's.
The Partial Rollover + LCGE Strategy
Here's where most farm estate plans stop too early. If the deceased has unused LCGE (approximately $1,250,000 for qualified farm property in 2026), the executor can do better than a full rollover. Instead of transferring at ACB, the executor elects a transfer price of ACB + the LCGE-sheltered amount.
On our $750K farm with $200K ACB and $550K of embedded gain: if the deceased has $550,000+ of unused LCGE, the executor elects a transfer price of $750,000 (full FMV). The $550,000 gain is triggered on the terminal return but fully sheltered by the LCGE deduction on line 25400. Net tax on the farm: $0. And the child inherits the farm at $750,000 cost base instead of $200,000.
Why Partial Rollover Beats Full Rollover (When LCGE Is Available)
Both scenarios cost the estate $0 in farm tax today. But with the partial rollover, the child's ACB is $750,000 instead of $200,000. If the child sells the farm at $900,000 in 10 years, their capital gain is $150,000 (partial rollover) vs $700,000 (full rollover). At 50% inclusion and Ontario's top rate, that's roughly $40,000 vs $187,000 in tax. The LCGE was going to expire unused at the parent's death anyway — using it to step up the child's basis is free money.
Province-by-Province Probate on a $1M Farm Estate
| Province | Probate on $1M | Notes |
|---|---|---|
| Ontario | $14,250 | $0 on first $50K, 1.5% above |
| British Columbia | $13,450 + $200 | Tiered + court filing fee |
| Saskatchewan | $7,000 | Flat $7/$1K from dollar one |
| Alberta | $525 max | Flat surrogate court fees |
| Manitoba | $0 | Eliminated 2020 |
| Quebec (notarial will) | $0 | No probate with notarial will |
Source: Ontario Estate Administration Tax Act; Alberta Surrogate Rules; provincial court of King's Bench probate-fee schedules. For the full comparison, see our probate fees comparison guide.
The Inter Vivos Alternative: Transfer Before Death (s. 73(3))
The s. 70(9) rollover applies at death. But ITA s. 73(3) provides the same rollover for lifetime transfers to a qualifying child. The conditions mirror s. 70(9) — qualified farm property, child resident in Canada, principally used in farming.
The advantage of a lifetime transfer: the farm exits the estate entirely, eliminating probate on the property. On a $750,000 Ontario farm, that's $10,500 in probate savings. The disadvantage: the parent loses title. For farming families where the child is already operating the land, a lifetime transfer combined with a right-of-use agreement is a common structure. For families where control matters, an estate freeze — freezing the parent's value in preferred shares of a family farm corporation — preserves control while directing future growth to the child's common shares.
Canada vs the US and UK on Farm Estate Transfers
Every top Google result for “estate on 2026” is US-focused. Here's why the Canadian situation is fundamentally different:
| Country | Farm Estate Treatment (2026) |
|---|---|
| Canada | No estate tax. Deemed disposition at 50% inclusion. Farm rollover (s. 70(9)) to qualifying child eliminates gain. LCGE shelters ~$1.25M. Provincial probate $0–$14,250 on $1M. |
| United States | Federal estate tax 40% above $15M per individual (OBBB Act, 2026). Step-up in basis at death. Special-use valuation (s. 2032A) reduces farmland FMV by up to ~$1.31M. Most farm estates pay $0 federal tax. |
| United Kingdom | 40% IHT above £325K nil-rate band. Agricultural Property Relief (APR) up to 100%. Thresholds frozen until April 2031. APR reform under active review. |
Sources: ITA s. 70(9), s. 110.6; IRS Rev. Proc. 2026; OBBB Act; gov.uk IHT thresholds. See our complete guide for the full Canada vs US vs UK comparison.
What the Executor Needs to Do
- Confirm qualified farm property status. Document the farming use for at least 2 of the years before death. CRA's principal-use test is strict — mixed-use or rental farms may not qualify.
- Get an agricultural appraisal. CRA requires FMV at date of death. Use a qualified farm appraiser, not a residential agent. Separate land and building values.
- Check the deceased's LCGE history. Review prior T1 returns for line 25400 claims. The 2026 limit is approximately $1,250,000. Subtract any prior use on QSBC shares or fishing property.
- Elect the transfer price. On the terminal T1, choose between ACB and FMV. If LCGE is available, elect higher to step up the child's basis. If no LCGE, elect ACB for full rollover.
- File the terminal return correctly. Report the deemed disposition on Schedule 3. Claim LCGE on line 25400 if using the partial rollover strategy.
- File the Ontario EAT. Include farm FMV in the probatable estate unless it was transferred before death or held in joint tenancy.
- Request a clearance certificate (TX19). Executor personal liability under ITA s. 159(1) applies until CRA issues clearance.
Frequently Asked Questions
Q:What qualifies as "qualified farm property" for the intergenerational rollover?
A:Under ITA s. 70(9) and the definition in s. 110.6(1), qualified farm property includes: (a) real property (land and buildings) used principally in the business of farming in Canada, (b) eligible capital property used in farming (e.g., quota), and (c) shares of a family farm corporation or interest in a family farm partnership. The property must have been used principally in farming by the deceased, their spouse, their child, or their parent for at least two of the taxation years before the transfer. CRA applies a “principal use” test — if the land was predominantly rented to a non-family operator or used for non-farming purposes, it may not qualify. A mixed-use property (farmhouse with significant non-farm rental income) can be partially disqualified. Source: ITA s. 70(9), s. 110.6(1).
Q:Can the executor choose a transfer price between ACB and FMV?
A:Yes. ITA s. 70(9.1) allows the executor to elect any amount between the deceased’s adjusted cost base and the fair market value. This is the mechanism behind the partial rollover strategy. If the deceased has unused LCGE, the executor can elect a transfer price that triggers a capital gain exactly equal to the LCGE shelter — resulting in $0 net tax on the estate while stepping up the child’s ACB. For example, on a farm with ACB $200,000 and FMV $750,000, if the deceased has $550,000 of unused LCGE, the executor elects $750,000 (full FMV). The $550,000 gain is fully sheltered by LCGE, and the child inherits a $750,000 cost base — eliminating all future tax on that gain.
Q:What happens if the child stops farming after inheriting the property?
A:If the child received the farm via the s. 70(9) rollover and subsequently stops farming and sells the property, the deferred capital gain is triggered at that point. The child’s gain is calculated from the inherited ACB (the transfer price elected by the executor) to the sale price. There is no clawback of the rollover itself — the rollover was valid at the time of death. However, the child may claim their own LCGE on the sale if they meet the qualified farm property conditions at the time of disposition. If the child converts the farm to non-farm use before selling, the property may lose its qualified farm property status, disqualifying it from the child’s LCGE.
Q:Does the farm rollover also avoid Ontario probate?
A:No. The intergenerational rollover under s. 70(9) is an income tax provision — it defers or eliminates the capital gains tax on the terminal return. Ontario’s Estate Administration Tax (probate) is based on the value of assets passing through the will, regardless of how they are taxed for income tax purposes. A $750,000 farm passing through the will triggers $10,500 in Ontario probate ($0 on first $50K + $15/$1K on remaining $700K) even if the rollover eliminates the capital gains tax. To reduce probate, the farm can be held in joint tenancy with the child, placed in an inter vivos trust, or transferred during the parent’s lifetime under the inter vivos rollover in s. 73(3).
Q:How does the LCGE interact with the farm rollover?
A:The LCGE and the farm rollover are separate provisions that can work together. The rollover (s. 70(9)) allows a tax-free transfer at ACB. The LCGE (s. 110.6(2)) shelters up to approximately $1,250,000 of capital gains on qualified farm property. The optimal strategy depends on whether the deceased has unused LCGE. If yes: a partial rollover (transfer at ACB + LCGE amount) uses the LCGE to step up the child’s cost base at zero net tax, reducing the child’s future tax bill. If no LCGE remains: a full rollover at ACB is the default, deferring the entire gain. The LCGE is a lifetime limit per individual — prior use on QSBC shares or fishing property reduces the amount available for farm property.
Q:Can the farm rollover apply to a transfer during the parent’s lifetime?
A:Yes. ITA s. 73(3) provides a parallel rollover for inter vivos (during-lifetime) transfers of farm property to a child. The conditions are similar: qualified farm property, child resident in Canada, property used principally in farming. The advantage of a lifetime transfer is probate avoidance — the farm is out of the estate. The disadvantage: the parent loses control of the property. A common strategy is an estate freeze — the parent freezes their interest at current FMV (via preferred shares in a family farm corporation), and the child’s new common shares absorb future growth. This combines control retention with tax deferral.
Question: What qualifies as "qualified farm property" for the intergenerational rollover?
Answer: Under ITA s. 70(9) and the definition in s. 110.6(1), qualified farm property includes: (a) real property (land and buildings) used principally in the business of farming in Canada, (b) eligible capital property used in farming (e.g., quota), and (c) shares of a family farm corporation or interest in a family farm partnership. The property must have been used principally in farming by the deceased, their spouse, their child, or their parent for at least two of the taxation years before the transfer. CRA applies a “principal use” test — if the land was predominantly rented to a non-family operator or used for non-farming purposes, it may not qualify. A mixed-use property (farmhouse with significant non-farm rental income) can be partially disqualified. Source: ITA s. 70(9), s. 110.6(1).
Question: Can the executor choose a transfer price between ACB and FMV?
Answer: Yes. ITA s. 70(9.1) allows the executor to elect any amount between the deceased’s adjusted cost base and the fair market value. This is the mechanism behind the partial rollover strategy. If the deceased has unused LCGE, the executor can elect a transfer price that triggers a capital gain exactly equal to the LCGE shelter — resulting in $0 net tax on the estate while stepping up the child’s ACB. For example, on a farm with ACB $200,000 and FMV $750,000, if the deceased has $550,000 of unused LCGE, the executor elects $750,000 (full FMV). The $550,000 gain is fully sheltered by LCGE, and the child inherits a $750,000 cost base — eliminating all future tax on that gain.
Question: What happens if the child stops farming after inheriting the property?
Answer: If the child received the farm via the s. 70(9) rollover and subsequently stops farming and sells the property, the deferred capital gain is triggered at that point. The child’s gain is calculated from the inherited ACB (the transfer price elected by the executor) to the sale price. There is no clawback of the rollover itself — the rollover was valid at the time of death. However, the child may claim their own LCGE on the sale if they meet the qualified farm property conditions at the time of disposition. If the child converts the farm to non-farm use before selling, the property may lose its qualified farm property status, disqualifying it from the child’s LCGE.
Question: Does the farm rollover also avoid Ontario probate?
Answer: No. The intergenerational rollover under s. 70(9) is an income tax provision — it defers or eliminates the capital gains tax on the terminal return. Ontario’s Estate Administration Tax (probate) is based on the value of assets passing through the will, regardless of how they are taxed for income tax purposes. A $750,000 farm passing through the will triggers $10,500 in Ontario probate ($0 on first $50K + $15/$1K on remaining $700K) even if the rollover eliminates the capital gains tax. To reduce probate, the farm can be held in joint tenancy with the child, placed in an inter vivos trust, or transferred during the parent’s lifetime under the inter vivos rollover in s. 73(3).
Question: How does the LCGE interact with the farm rollover?
Answer: The LCGE and the farm rollover are separate provisions that can work together. The rollover (s. 70(9)) allows a tax-free transfer at ACB. The LCGE (s. 110.6(2)) shelters up to approximately $1,250,000 of capital gains on qualified farm property. The optimal strategy depends on whether the deceased has unused LCGE. If yes: a partial rollover (transfer at ACB + LCGE amount) uses the LCGE to step up the child’s cost base at zero net tax, reducing the child’s future tax bill. If no LCGE remains: a full rollover at ACB is the default, deferring the entire gain. The LCGE is a lifetime limit per individual — prior use on QSBC shares or fishing property reduces the amount available for farm property.
Question: Can the farm rollover apply to a transfer during the parent’s lifetime?
Answer: Yes. ITA s. 73(3) provides a parallel rollover for inter vivos (during-lifetime) transfers of farm property to a child. The conditions are similar: qualified farm property, child resident in Canada, property used principally in farming. The advantage of a lifetime transfer is probate avoidance — the farm is out of the estate. The disadvantage: the parent loses control of the property. A common strategy is an estate freeze — the parent freezes their interest at current FMV (via preferred shares in a family farm corporation), and the child’s new common shares absorb future growth. This combines control retention with tax deferral.
This Is the Kind of Decision Where a Fee-Only CFP Pays for Itself
The difference between a full rollover, a partial rollover with LCGE, and no rollover can exceed $120,000 on a single farm estate. The election is made once, on the terminal return, and it's irreversible. Life Money's advisors offer a flat-fee 90-minute consultation that walks through your specific numbers — farm FMV, cost base, LCGE history, RRIF balance, and probate exposure — so the executor files the right election the first time.
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