Livestock Tax Deferral Provision
The Livestock Tax Deferral provision under the Income Tax Act allows farmers that carry on a farming business in a prescribed area who sell all or part of their breeding herd due to drought, excess moisture or flooding to defer a portion of sale proceeds to the following year when filing their taxes.
Offered by Agriculture and Agri-Food Canada (AAFC)
Amount
Where the breeding herd has been reduced by at least 15%, but less than 30%, 30% of income from net sales can be deferred; where reduced by 30% or more, 90% of income from net sales can be deferred
Quick eligibility check
Who can apply
The Livestock Tax Deferral provision under the Income Tax Act allows farmers that carry on a farming business in a prescribed area who sell all or part of their breeding herd due to drought, excess moisture or flooding to defer a portion of sale proceeds to the following year when filing their taxes.
When prescribed regions are identified:
- they are deemed eligible for the entire taxation year
- the list of prescribed regions is posted to this web page
To defer income, the breeding herd must have been reduced by at least 15%.
Regions that are nearby to drought, excess moisture, or flood conditions may also be prescribed. Based on stakeholder feedback received over the past two years, these nearby regions are now identified as extended prescribed regions. Previously, since 2024, they were identified as buffered designated regions.
Just as with previous years, where both designated and buffered designated regions were eligible, all prescribed regions, including those identified as extended prescribed regions, will be eligible. This ensures those neighbouring farms that may face the same challenges can still benefit from the Livestock Tax Deferral provision.
About the funding
- Where the breeding herd has been reduced by at least 15%, but less than 30%, 30% of income from net sales can be deferred
- Where the breeding herd has been reduced by 30% or more, 90% of income from net sales can be deferred
In a year in which a region has been prescribed, income from the sale of breeding livestock can be deferred to the next tax year when the income inclusion may be at least partially offset by the cost of reacquiring the breeding livestock. In the case of consecutive years of drought, excess moisture or flooding, farmers may defer this income to the first year in which the region is no longer prescribed.
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