If you are planning development of a property that includes ecologically significant or sensitive land you may be required to preserve and protect some of the property through a land transfer or a conservation covenant. If this is not a requirement, you may also wish to consider a voluntary donation of land or a conservation covenant.
Land that is transferred or covenanted as a requirement of development is not eligible for a tax receipt.
Tax implications of gifting land and covenants
If you qualify for the Ecological Gifts Program, your tax receipt can be carried over for up to ten years, and can reduce or eliminate the capital gains tax that might otherwise be owed.
Ecological Gifts Program is a federal program that you can apply to when donating land or a conservation covenant to receive tax benefits for your donation. This program is of particular interest for property owners dealing with issues of capital gains on the land or those who pay high levels of income tax. If you purchased your land many years ago it has likely appreciated in value, making it difficult to sell or transfer ownership without triggering significant capital gains tax consequences.
Not all land is eligible for Ecological Gift Program. Generally, natural lands with lower human disturbance levels are of interest.
Property tax implications for conservation covenants
In some cases, a conservation covenant may lower the property tax owing on land. Learn more
The Islands Trust also offers a property tax exemption program. Natural Area Protection Tax Exemption Program (NAPTEP) is a program unique to the Islands Trust Area. If you voluntarily place a conservation covenant on all or a part of your property, the protected portion would receive a 65% reduction in property taxes. This program makes owning protected land more affordable. Learn more
Manager, Islands Trust Conservancy