I Inherited Farmland in Saskatchewan. Should I Rent It or Sell It?
There's no single right answer — it depends on whether you need cash now, your tax position, and whether you want an income-producing asset. Renting keeps a hard, appreciating asset that pays annual income (a Saskatchewan benchmark around $82/acre) and defers capital gains, but means managing a tenant. Selling gives immediate, simple liquidity but triggers capital gains and gives up future upside. Because selling is irreversible, many out-of-province heirs rent first — it preserves both income and options while they decide.
Inheriting farmland is rarely simple. Along with the land often comes a tangle of feelings — a connection to a parent or grandparent, a place you may have visited as a child — and a very practical problem: you live in Toronto, Vancouver, or Calgary (or overseas), you don't farm, and now you own a quarter section of Saskatchewan cropland you're not sure what to do with.
The decision usually comes down to two paths: rent it out and keep it as an income asset, or sell it and convert it to cash. This guide walks through both honestly — the money, the tax, and the trade-offs — so you can make the decision that fits your situation, not someone else's.
First, understand what you actually inherited
Before choosing a path, get clear on three things. They shape every decision that follows.
Saskatchewan farmland has been one of Canada's best-performing assets, appreciating on the order of 10–11% annually over the past two decades, and it produces rental income of roughly $82 per acre per year at the provincial benchmark (ranging from about $46 to $114 depending on soil and region). A single quarter section (160 acres) might therefore generate somewhere around $10,000–$18,000 in annual rent, with almost no carrying cost. Knowing your parcel's specific rent and value is the foundation of the rent-or-sell decision.
Canada has no inheritance tax. Instead, when you inherit, your adjusted cost base is generally the land's fair market value at the time you inherited it. That means if you sell later, your capital gain is measured from that inherited value — not from what your grandparent paid decades ago. This matters enormously, and it's why establishing the date-of-death valuation early is important.
Saskatchewan restricts ownership of more than 10 acres of farmland to Canadian citizens and permanent residents. If you inherited the land and you're a citizen or PR, you're fine. This is worth confirming early if your residency status is unusual.
Renting vs. selling: an honest comparison
Here's the core trade-off, laid out plainly. Neither column is "better" — they suit different needs.
- Keeps a hard, inflation-resistant asset that has appreciated ~10–11%/yr historically
- Annual income with almost no carrying cost
- Defers capital gains — no taxable sale event
- Preserves options: you can always sell later
- Keeps a family connection to the land intact
- Requires setting a fair rent and managing a tenant
- Illiquid — not quick cash if you need it
- Rental income is taxable each year
- Immediate liquidity — a lump sum you can redeploy
- Simplicity — no tenant, no ongoing management
- Clean break if the land is far away or emotionally complicated
- May access the lifetime capital-gains exemption in some cases
- Triggers capital gains tax on the sale
- Gives up all future appreciation and income
- Irreversible — you can't buy back the family land
- Timing the market is hard; a rushed sale often underprices
Which path fits your situation?
Move past the generic pros and cons to your actual circumstances. Renting or selling tends to fit different needs:
| If you… | Leaning |
|---|---|
| Need a lump sum now (debt, a purchase, other plans) | Sell |
| Want ongoing income and long-term growth | Rent |
| Are unsure and don't need the cash | Rent first |
| Value simplicity over everything | Sell |
| Want to preserve a family legacy / the land itself | Rent |
| Have a large embedded capital gain and exemption access | Get advice — could favour sell |
| Live out of province and worry about managing it | Rent (it's manageable remotely) |
Notice how often "rent" appears when the driver isn't an immediate cash need. That's not a coincidence — for an heir who doesn't need liquidity right away, renting captures income and appreciation while keeping the sell option alive.
"But I don't live in Saskatchewan and I don't farm"
This is the single biggest reason heirs default to selling — and it's based on a misconception. You do not need to live in Saskatchewan, and you do not need to know anything about farming, to rent out inherited land. As the owner, your role is simply to own the land and collect rent; a professional farmer does the actual farming.
The entire process can be handled remotely: assessing the land's true rental value, setting a fair market rent through a competitive rental auction, signing the lease, and managing the tenant relationship over time. Absentee ownership of Saskatchewan farmland is common and well-established — many owners have never set foot on their land.
"The fear of managing far-away farmland leads many heirs to sell a great asset too quickly. In reality, the management problem is the easiest part to solve."
— ExtrAcre FarmlandA sensible first step, whichever way you lean
Whether you end up renting or selling, the smartest move is the same: find out what the land is actually worth — in both rent and sale value — before you decide. Too many inheritance decisions are made on guesswork or a single opinion, and an irreversible sale made on bad information is the costliest mistake of all.
Get an independent read on the parcel's rental value and its market value. With those two numbers in hand, the rent-or-sell choice usually becomes clear — and if you lean toward selling, you'll know you're not leaving money on the table. ExtrAcre can help with both: a competitive rental path if you keep it, and, through our licensed real estate partner, a sale if that's the right call for you.
Not sure whether to rent or sell?
Start with a free, no-obligation rental appraisal to learn what your inherited parcel is worth — in income and in value — before you make an irreversible decision.
Get a Free Rental Appraisal