.png){kind=small}
For landowners who are looking for ways to add or strengthen conservation on their properties, and claim financial benefits for doing so, there are a number of choices with different benefits and responsibilities. Landowners may consider various types of conservation options for their property based on their goals, long-term plans and financial situation. The conservation opportunities described in this page are opportunities to guarantee stewardship or long-term conservation of land in Ontario and other regions in Canada. If you own farmland, refer to the Canada-Ontario Environmental Farm Plan (EFP) for stewardship programs.
Conservation Organizations
Conservation options can be carried out between landowners and conservation organizations or governmental programs directly. Non-governmental organizations across Canada that have authority to carry out conservation programs include Land Trusts and other land conservation not-for-profit organizations. Prominent national land conservation organizations include the Nature Conservancy of Canada, Ducks Unlimited, and Wildlife Habitat Canada.
For a detailed list of Land Trusts in Ontario and other provinces, visit Ontario Land Trust Aliance’s member directory. For land trusts in British Columbia, refer to the Land Trust Alliance of British Columbia directory. For land trusts in Alberta, refer to the Regional Land Trusts of Alberta.
Conservation Programs and Opportunities
Some of the most accessible options with the benefits and commitments required are:
1. Managed Forest Tax Incentive Program (MFTIP)
The Ontario Managed Forest Tax Incentive Program (MFTIP) is a provincial program that encourages good forest management by giving a property tax reduction to eligible landowners who prepare and follow an approved Managed Forest Plan. When a forested area is enrolled in the program, it is classified as managed forest and taxed at 25% of the municipal residential property tax rate. The regular rate still applies to any other part of the property that is not managed forest, such as residential areas, yards, barns, outbuildings, and driveways.
A person designated by the Ministry of Natural Resources as a Managed Forest Plan Approver must prepare or approve a Managed Forest Plan for a property. This plan describes how the landowner will manage their forest responsibly over a 10-year period. To enroll in the program, a Managed Forest Plan Approver submits the plan to the ministry. Landowners need to submit a 5-year progress report and update the management plan every 10 years to stay in the program, with a new approved Managed Forest Plan.
Resources: For more information visit Ontario’s page on the MFTIP program. A list of Managed Forest Plan Approvers can be found on Ontario’s MFTIP webpage.
Pros: Provides tax reductions to landowners that maintain good forest management. Does not impede participation in other conservation efforts such as the implementation of a conservation easement.
Cons: Short-term program (5-10 years) that needs to be renewed to guarantee economic benefits
2. Conservation Land Tax Incentive Program (CLTIP)
The Conservation Land Tax Incentive Program is a national program that encourages and supports long-term private stewardship of provincially important natural areas. Under the program, portions of a property that have eligible natural heritage features may qualify for a 100% property tax exemption. The areas need to be identified by the ministry as one of the eligible land types and 1⁄5 of a hectare (½ acre) or larger in size. The landowner needs to commit to protecting the designated portion of their property and allow ministry staff to inspect it if requested.
The natural heritage features eligible types of land are areas of natural and scientific interest that have been approved by the ministry as provincially significant in Ontario are: Niagara Escarpment Natural Areas, habitats of endangered species where specific guidelines for the program have been developed by the ministry, wetlands approved by the ministry as provincially significant, and community conservation lands.
Resource: For in depth descriptions or eligible features and more information, visit Ontario’s page on the Conservation Land Tax Incentive Program.
Pros: Possibility of 100% property tax exemption.
Cons: Limitations on participation as property must have eligible natural heritage features.
3. Conservation Easement
A Conservation Easement is a legally binding agreement, between a landowner and a conservation organization, that restricts land use to protect its ecological values. The land remains in private ownership, and the landowner continues to use it within the terms of the easement. The terms of the easements are developed and settled on through consultation between the landowner and the conservation authority. A conservation easement is applied to the property, or section of it, in perpetuity, and binds present and future landowners. Landowners with a MFTIP or other land management programs can apply for a conservation easement, and some conservation easement programs may require the development of a management plan for the property.
A conservation easement can be developed and implemented, in collaboration with landowners, by land trusts, municipalities, conservation authorities, and non-governmental not-for-profit natural heritage organizations. Conservation organizations can act on a national or provincial level.
Resources: Nature Conservancy Canada and Ducks Unlimited Canada for national actors, Ontario Heritage Trust and Ontario Land Trust Alliance for provincial actors in Ontario. Further information sourced from the Haliburton Land Trust.
Pros: Ensures conservation in perpetuity, regardless of change of ownership.
Cons: Imposes limitations on land usage and development.
4. Ecological Gifts Program
The Ecological Gifts Program provides a way for Canadian property owners with ecologically sensitive land to protect nature and leave a legacy for future generations by ensuring that their land is conserved in perpetuity. Lands qualifying as ecological gifts must be certified as ecologically sensitive according to specific national and provincial criteria. This certification is carried out by the federal Minister of the Environment or a delegated authority. Landowners who donate or enter into a conservation easement may be eligible to receive a tax receipt through the Ecological Gifts program. Tax benefits of the program include:
Corporate donors may deduct the amount of their ecological gift directly from their taxable income, while its value is converted to a non-refundable tax credit. A 15% rate is applied to the first $200 of total gifts for the year and 29% to the balance.
In most provinces, a reduction in federal tax will also reduce provincial tax,
The taxable portion of the capital gain is reduced to 0 in the case of an ecological gift.
The carry-forward period for claiming these donations is 10 years..
Avoiding Capital Gains…. deemed disposition (biggest incentive)
Although many ecological gifts are outright donations of land with no conditions attached, making a gift of property does not necessarily mean severing the connection donors have with their land. There are options available that allow donors and recipients to tailor their arrangements to suit their particular needs.
Resource: For information on the different scenarios and tax benefits under the ecological gifts program, visit the government’s Donation and Income Tax Scenario webpage. For detailed information on the process and requirements, visit the federal government’s Ecological Gifts Program webpage. For detailed information on tax benefits, visit the federal government’s Gifts and Income Tax webpage. For information on Split-receipting and Deemed Fair Market Value, visit the federal government’s website. For information on regional offices and their contacts, visit the federal government’s Ecological Gift Program office in their region website.
Pros: Tax benefits for landowners. Can be received if the landowner has implemented other conservation programs to their property, such as a conservation easement.
Cons: Limitations on participation as property must be certified as ecologically sensitive.
5. Donations to Conservation organizations, Outside the Ecological Gifts Program
Bequest: The donation of a property to a qualified conservation organization provided for in a will, results in the unrestricted use of land by the owner until death, as well as a possible reduction of estate taxes. A bequest can reduce taxes payable upon death as the landowner’s estate receives a charitable donation receipt for the full value of the bequest.
Outright Donation: All rights to the land are transferred to a qualified recipient (such as a land trust or conservation organization), resulting in an income tax reduction for the full appraised value of the land, and reduced estate taxes. In a less full value donation, only selected property rights are donated, which may result in tax reductions.
Capital Donation: Donors receive a tax receipt for the appraised value of the property. Capital donations can be done on properties with previous conservation easements established. Any deemed capital gain is subject to taxation.
Reserved Life Estate: Property is donated or sold, in whole or in part, to a qualified recipient with a provision that reserves the right of the owner (and/or specified persons) to use the land, or a portion of it, until death. The owner may claim an income tax deduction for the value of the donation, estate taxes may be reduced and property taxes are levied only on that portion retained for personal use.
Resource: For conservation information, visit the websites of Long Point Basin Land Trust , the Nature Conservancy Canada, the Rideau Valley Conservation Foundation, and Ontario Nature. Details on taxation related to deemed capital gains can be found in the Nature Conservancy Canada's guidelines. Information on income tax deductions, estate tax reductions, and property tax levies for retained personal use is available through the Kensington Conservancy and Long Point Basin Land Trust.
6. Sales to Conservation Organizations in Ontario
Bargain Sale or Split Receipt: The sale of land to a conservation organization, such as a land trust, non-profit organization or municipality, at less than fair market value. This option provides immediate income from the sale, reduces potential capital gains liability, and entitles the landowner to a charitable income tax deduction based off the difference between the sale price and the full fair market value of the property.
Right of First Refusal: The landowner can grant a Right of First Refusal so that land trusts or conservation organizations have the first chance to buy the property, and and when they decide to sell.
Resources: Bargain Sale or Split Receipt information can be found through the Long Point Basin Land Trust, The Land Conservancy of British Columbia, and the North Shore Land Alliance. Guidance on Right of First Refusal is available from Ontario Nature, Kensington Conservancy, and Ontario Land Trust Alliance’s Land Securement Manual.
7. Cross-Border Conservation - Conserving Land Owned by U.S Taxpayers
U.S taxpayers who own Canadian properties have tax incentives in both countries to encourage conservation. Conserving some or all of a Canadian property can reduce Canadian tax on capital gains for the landowner and their heirs, and U.S tax benefits are potentially available as a result of a gift. U.S taxpayers who own land in Canada and wish to place a Conservation Easement Agreement on their property may work with the American Friends of Canadian Conservation.
Resource: For more information, refer to Ontario Land Trust Alliance’s (OLTA) Cross-border Conservation Handbook
コメント