Examples of substantial improvements that go beyond the duration or termination of the lease are as follows: rental income from a cash lease cannot be used as a basis for contributions to the Canada Pension Plan (CPP). Farmers who lease their land and have no other source of income eligible for the APP cannot contribute to the plan. This can lead to a reduction in the amount of CPP pension benefits. Although rental income is not eligible for CPP contributions, it is considered activity income for the purposes of registered retirement plan (RRSP) contributions. Any form of business agreement requires a good level of mutual respect and trust. Renting land is no different. To be successful, the tenancy agreement must satisfy both the landlord and the tenant. Before entering into a rental agreement, landlords and tenants should consider more than the price. The compatibility between the lessor and the tenant and the fairness of the lease are important aspects to respect. As with any lease, the terms must be negotiated to the satisfaction of both parties. One of the main difficulties after setting the initial lease amount is to determine the annual increase. For longer-term leases, an unbiased attitude can be used, such as for example. B the annualized basic price index published by Statistics Canada.
It is advisable to speak with a successor planner to define some of these terms. Leasing Guarantee – Registering an unpaid portion of the lease payment with ServiceOntario as part of the registration of the personal title guarantee helps protect a landowner`s interests as a creditor in the event of non-payment by a tenant. Property owners can register online or by phone with ServiceOntario. Purchase option – Parties may include an option similar to the right of pre-emption that allows the tenant to acquire the leased land. This can be for a limited or unlimited period of time, either for a fixed price or for a price determined by an objective method such as a real estate valuation by a certified agricultural expert. As a general rule, a lease is taxable unless it is expressly exempted in accordance with Part I of Schedule V to the Excise Act, which can be considered in limited situations such as the country intended for long-term residence. . . .