Many acres of ecologically sensitive land belong to individual Canadian owners, and often they wish to protect this land for future generations. This goal is actually supported by the government, through Environment Canada’s Ecological Gifts Program. This allows Canadians to protect their land and leave a valuable legacy by donating land for conservation.
According to Environment Canada, to date there have been 912 ecological gifts made, representing 141,000 hectares of wildlife habitat, valued at more than $575 million. Land can be donated to Canada, a province or territory, a municipality or a registered charity approved by the Minister of the Environment.
Donating Land – Valuation
The actual value of a donation is determined by the Minister of the Environment based on Fair Market Value (FMV), and this figure can then be claimed as a charitable donation. And unlike other donations, the gift of ecologically sensitive land is not limited to a percentage of your net income. The entire amount can be claimed in one year, if you have enough income.
However, not every piece of land qualifies. The Minister of the Environment or a designate determines if your property is important to the preservation of Canada’s environmental heritage. Examples of ecologically sensitive lands include:
- Provincially Significant Wetlands
- Areas of Natural and Scientific Interest (ANSIs)
- Areas identified as components of the Natural Heritage System, such as significant stream corridors and significant woodlands
- Significant portions of the habitat of endangered, threatened or vulnerable species in Ontario
- Areas managed for wildlife habitat conservation purposes which qualify under the Managed Forest Tax Reduction Program.
Donating Land and Taxes
Normally, giving away a property which has increased in value since acquisition incurs a capital gains calculation. Fifty per cent of that increase is included in your income. However, in the case of ecologically sensitive land, the inclusion rate is zero, which means you are not taxed on it (although this does not apply to donations to private foundations). And you can continue to live on the land even if you make a donation. You just need to ensure you have made provisions for the land to be passed to Environment Canada.
The government of Canada uses tax provisions to encourage charitable giving. If you own a piece of ecologically valuable land, giving it to future generations is well worth considering.
Have you considered donating land as a living legacy?
This article is brought to you by Cleo Hamel at H&R Block.