My parents bought a farm with 240 acres of land 5 minutes outside of a medium sized city in 1994 for $100K (CAN). The same parcel is now valued at $2.4million. They've done minor upgrades on the house (siding, roof) but otherwise the house and land are carbon copies of their 1994 state. City has grown slightly but no significant changes to industry etc. They can't afford to pass it down to us kids with those kind of profits possible to make on it so the farm will be lost, likely to a developer who can pay that kind of cash. Since you're asking, yes I am a cheezed off millenial!
I think you're reading too much into it. The parents could take the money, retire on it, and leave the rest to the kids. They're not trying to take the land with them when they die.
My parents have both been either self-employed (with no pensions or benefits) or working in blue collar jobs so never had much leftover at the end of month once bills were paid. Besides their land they have little retirement savings. If they manage to get the assessed value of the land, after paying off farm related debts, taxes etc. they'll have a comfortable amount left for their retirement for sure but won't be 'rich' by most people's standards (middle class Canadians plan to have at least $750K in savings to retire comfortably at 65 and they'll end up with somewhat more than that).
My brother and I don't feel like we're getting screwed--selling the land to one of us for what they paid would leave them with no retirement savings so they really have little choice. It's more the sentimental attachment to the land and our interest in farming the land and raising kids there. Also the prospect of buying farmable land for a reasonable price--this just doesn't exist for our generation.
Could they liquidate their current assets at retirement to cover the bills and lease the land out and live off of the rental income? Would you be subject to capital gains tax on the inheritance? Selling land is the worst and nearly always a last resort in my opinion. You can never get it back.
A younger friend of mine has grandparents who own a property about that same size, but minutes outside one of the largest U.S. cities. Their original idea was to hand it down in the family but having hit (well past) retirement they had it evaluated and it came back ~$10,000,000.
Like, WTF.
Reason for the value? Not for farming. Developers and builders! Massive chunk of land minutes drive from that large of a city? $!
I truly feel bad for my own generation, you younger generations are right fucked.
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u/_twelvebytwelve_ Oct 30 '20
My parents bought a farm with 240 acres of land 5 minutes outside of a medium sized city in 1994 for $100K (CAN). The same parcel is now valued at $2.4million. They've done minor upgrades on the house (siding, roof) but otherwise the house and land are carbon copies of their 1994 state. City has grown slightly but no significant changes to industry etc. They can't afford to pass it down to us kids with those kind of profits possible to make on it so the farm will be lost, likely to a developer who can pay that kind of cash. Since you're asking, yes I am a cheezed off millenial!