For those looking to purchase a rural home or hobby farm in Alberta, here are some of the most frequently asked questions we get from buyers.
From land use to affordability, utility systems and vital services, there is certainly more to consider when you are buying a home on a larger acreage, rural home or hobby farm.
1. Is it more affordable to buy a rural home in Alberta? (Taxes, purchase price…)
Yes and No. This really depends on a multitude of factors with the biggest one being location.
If you are comparing a home in the exact same location with the exact home, it makes logical sense that the rural home that is on a larger piece of acreage is going to demand a higher price. But a high-end home in Canmore on a 50 x 100ft lot may be more expensive than buying a 40 acre farm in Pincher Creek.
Location, the type of house, size of house, size of property, condition of house, etc will play a part in the cost to acquire the home. These factors will influences your tax rate as well.
If you have a $1.5M budget, perhaps you won’t be able to purchase a completely renovated 5 acres property on the outskirts on Canmore, but you certainly could find a beautiful turn-key rural home somewhere in Foothills County.
Keep in mind when you purchase a rural home you will also be spending a little more on additional inspections (well, cistern and septic).
Buying a rural home is an investment. Both financially and into your lifestyle. It may come with some additional costs but the quality of life and value to your family (and wallet) long term is well worth it!
2. Do I need an RPR report?
Most real estate transactions will require a Real Property Report (RPR) in Alberta. If you have an existing report and you haven’t made any changes or additions to your property, you can sign a Statutory Declaration or Affidavit stating the existing RPR is accurate and the property hasn’t changed since the RPR was prepared.
If you are a Seller, it is simple to get an RPR. You simply need to contact an Alberta Land Surveyor. If you have an RPR that you need to make updates too, we recommend calling the Surveyor who completed the original.
Don’t forget, once you get your report from the Surveyor, you will also need to send it to your city or county to get a compliance certificate.
In cases where the property is larger (often at least a quarter section), an RPR is typically not required.
3. I am interested in a property for sale but it has a conservation easement on it. What does this mean?
In short, a conservation easement is legally binding (voluntary) agreement between a landowner and a conservation organisation or government body to essentially protect part or all of a property in perpetuity. The easement is registered on the title of the property while the landowner continues to retain ownership/title.
Any future owners will be bound by the terms of this conservation easement.
A conservation easement can be beneficial as it could protects, conserves and enhances the ecological, environmental and agricultural aspects of the land. It can prevent development, subdivision and may have financial and tax benefits.
However, it can also be restrictive as to what you can do with or on your property depending on the terms.
The best course of action is to ensure you read and accept the terms of the existing agreement prior to purchasing a property with a registered conservation easement on it.
4. My property currently has a cistern on it, is there a way to check if a well could be placed on the property instead?
Yes, you can hire a well driller contractor to come out and check for a viable aquifer. If the contractor is local he may know the area already and have information on whether to not it is a viable option.
If you have an older home and there is no well, it is very likely it is not a viable option which is why your home has a cistern on it.
5. What is the internet service like?
A very valid question in todays age.
Unless it is an extremely rural, the home should have access to a decent internet service.
This question can be asked of the seller in advance, you can use Google to search for local internet services – most of these have an address search on their website and you can see if typical services like Shaw or Telus are offered there.
If not, there are also smaller internet companies that offer services in rural areas in Alberta like Tough Country Communications, Xplore Net, Starling among others.
It is a good idea to check cell service while you are at the property as well. Even if you think the area has good cell service always double check. For example, we have great cell service on our property but just a minute north of us, our neighbours have no cell service.
6. If the property has agricultural zoning, will I get a tax benefits?
In short no, just because your property is zoned agricultural does not mean you will pay less taxes or receive tax benefits. Although this question likely requires more a nuanced explanation but in short, your property will need to be an operating farm with agricultural production, earning income from whatever you produce on the farm.
If you are operating a hobby farm and selling vegetables at the local farmers market you still wouldn’t qualify – this would simply be looked at as taxable income.
Again, this is a very difficult question to answer if we don’t know your information. You should always speak to an accountant when it involves taxes.
7. What conditions should I include in an offer when buying a rural home in Alberta?
Another property dependant questions but in general we want to see the regular home and financing conditions (if applicable). Second to those you’ll want to include septic and water system (well or cistern) inspections as well as a water test condition. You may want to include a zoning confirmation and/or include a due diligence condition as well to confirm you can do what you want to do on your rural property.
Conditions or warranties related to obtaining a Real Property Report (RPR), covenants, rights of way, paying GST, Tenant Farmers, road maintenance, Tax incentive programs, lawyer review, heating systems, WETT certifications, appraisals, and more could all apply.
There will also be important warranties and representations from the seller that you’ll want to include in your offer to protect yourself.
8. The home I am interested in is on an unpaved road, who will maintain this road?
A great question and one you should get an answer to prior to purchasing your rural home.
If it is a very rural road you are likely not going to be on a priority road for snowplowing and road maintenance.
The seller should be able to readily tell you this information or you/your agent can call your local municipality or township to confirm if the road is maintained by them or if it is a road you will need to maintain.
9. How do I know they won’t develop the farmland behind my house?
Now this can be a little more difficult…
The first step is to check the zoning of the surrounding properties… Do they have environmental zoning protecting the area? Are they zoned agricultural? Is there a registered conservation easement on any of the property? What is the history of the area and does the local government have track record for allowing a lot of development to take place with passive re-zoning policies or have they been more restrictive in that regard?
Then check how close the nearest town is. Is there a lot of development and urban sprawl happening there? Is the rural home located on the outskirt of a small town in Alberta?
Unfortunately there is no predicting if development could happen 10, 20 or 50 years into the future.
If the surrounding properties are environmentally protected or have a conservation easement you are likely ok but even agricultural (and sometimes environmental) zoning doesn’t always guarantee the farm next door will stay that way.
We go out of our way to do as many checks on this as possible when helping you buy a rural home in Ontario.
10. How do I know if they water is safe to drink?
You need to get a water quality test done. Preferably you do this during your conditional time period.
Often this is a free service offered by the local municipality (through Alberta Health Services).
You can also pay a lab to do this test if preferred.
This test should be done for both well water systems and cisterns on rural properties.
