Buying Land in the Agricultural Land Reserve in British Columbia

Land in the Agricultural Land Reserve, often called the ALR, is protected for farming. That can be attractive if you want to farm, but it also means that plans many buyers take for granted, such as splitting a parcel or adding a second home, may need approval or may not be possible at all.

This article explains the main limits to check before buying ALR property in British Columbia. The details of what is allowed on a specific parcel depend on its zoning, its history and its Commission decisions, so confirm those facts before you remove subjects.

This article covers the law of British Columbia.

Find out whether the land is in the ALR

Do not rely on a listing alone. Ask your lawyer to confirm whether the parcel is in the reserve and whether any past decisions or conditions affect it. Whether a particular rural lot is in the reserve is something to confirm rather than assume. If it is, the limits on subdivision and non-farm use described below may matter to your plans.

Subdivision and non-farm use are separate questions

ALR land cannot be subdivided unless the Agricultural Land Commission allows it or a regulation permits it, and that is true even for parcels under 2 acres. If you are buying a large parcel planning to split it for family or resale, build that risk into your decision and do not assume approval.

Non-farm use is a different approval. Non-farm use approval does not authorize subdivision, and subdivision approval does not authorize non-farm use. So if you want to run a business that is not farming, or to use the land in another non-farm way, ask what approvals would be needed. Whether a second home or additional dwelling is possible depends on the rules that apply to the parcel and on local zoning, so get that confirmed before you commit.

Water for farming

Farming often uses more water than a household does. Households using well water for domestic purposes are exempt from licensing and from provincial water fees and rentals, but all users of groundwater for non-domestic purposes, including irrigation, need a licence. A licence application carries a one-time application fee (minimum $250) and annual water rental fees that depend on the purpose and quantity.

Existing non-domestic users had to apply on or before March 1, 2022 to keep a priority date based on when they began using the water. Those who missed it must apply as new applicants, and the application date sets the priority, on a first in time, first in right basis.

If the farm already has a licence, its rights and obligations, including rental payments, are tied to the land, so a buyer takes on the licence and its rentals. Rights under a licence that is appurtenant to land pass with a conveyance of that land, and the owner must give written notice of the conveyance to the comptroller or a water manager before completing the disposition. Also test any well, since Health Canada guidance says to test for microbes at least once every 6 months and a neighbour's result cannot be relied on.

Taxes, foreign buyers and reporting

Property transfer tax applies at 1% of fair market value up to $200,000, 2% on the portion over $200,000 up to $2,000,000, and 3% on the portion over $2,000,000, with a further 2% on the residential value above $3,000,000. Foreign nationals, foreign corporations and taxable trustees may owe an additional 20% on their share of the residential portion of property in specified areas. Those areas are the Capital Regional District, Fraser Valley Regional District, Metro Vancouver Regional District, Regional District of Central Okanagan and Regional District of Nanaimo.

The federal ban on purchases of residential property by non-Canadians was announced to run to January 1, 2027. Property that is not within a census agglomeration or census metropolitan area is excluded from the definition of residential property. A farm parcel may therefore fall inside or outside the ban depending on its location.

If you buy through a corporation or trust, a transparency report may be required under the Land Owner Transparency Act. In taxable areas, owners must also make a speculation and vacancy tax declaration every year by March 31. Owners who qualify for an exemption, such as for a principal residence, may avoid the tax.

What to do next

• Confirm whether the parcel is in the ALR and whether past Commission decisions affect it.
• Decide what you want to do: farm, build, subdivide or use the land for something else.
• Ask what approvals those plans would need from the Commission and the local government.
• Check water needs, existing licences and well quality.
• Ask about property transfer tax, any additional tax and annual declarations.

Make your offer conditional on confirming the approvals that matter to your plans. A lawyer can help you set conditions and deadlines that fit how long those answers may take.

Frequently asked questions