A Land Trust is a non-profit, charitable organization committed to the long-term conservation of environmentally significant lands. A Land Trust may own land itself, or it may enter into Conservation Easements with property owners to protect or restore natural features on the owner’s land.
A Conservation Easement is a way for a landowner to permanently protect the natural values of their land while still retaining title to the land. It is a legal agreement between a landowner and a qualified Land Trust. Conservation Easements are tailor made to meet the needs of an individual landowner and can cover an entire parcel or portions of a property.
Conservation Easement Legislation can be found under articles 28 - 35 in the Alberta Land Stewardship Act.
Landowners and Land Trusts collaborate to draft Conservation Easements tailored to reflect both the landowner's desires and the need to conserve the natural features of the property. Conservation Easements typically restrict development and subdivision to the degree that is necessary to protect significant conservation values of the particular property. Some Conservation Easements include areas known as “exclusions” where development is allowed. These exclusion areas are typically where homes are located.
Most Conservation Easements are negotiated in perpetuity, binding the original owner and all subsequent owners to the Easement's restrictions. Conservation Easements are registered on the applicable Title of Land.
Outright gifting of land, or a partial interest in the land through a Conservation Easement, to a qualified Land Trust could result in tax benefits for the landowner. The tax benefits of providing a gift of land or an easement on capital property fall under regular charitable gifting rules under the Federal Income Tax Act. The tax benefits are normally in the form of a tax receipt. Corporate donors deduct the receipt amount directly from their net income, while individuals use the receipt to calculate a non-refundable tax credit. The value of the tax receipt is determined by a qualified appraiser, chosen by the donor or the recipient organization. In the case of a Conservation Easement, the value of the tax receipt is based on the difference between what the land was worth before the easement was granted, and what it was worth after.
If the Conservation Easement or land gifted can be certified as 'ecologically sensitive,’ additional tax benefits may result from the federal Ecological Gifts (EcoGifts) Program. An EcoGift can be applied against up to 100% of the donor’s net annual income in the year the donation is made and any unused portion of the receipt can be carried forward for up to ten years. Agricultural Conservation Easements do not qualify as EcoGifts but would be eligible for the regular charitable tax receipt. There is no taxable capital gain on an EcoGift.
As of February 2020, 1,503 ecological gifts valued at $928 million have been donated across Canada, protecting almost 497,000 hectares of wildlife habitat. Many of these ecological gifts contain areas designated as being of national or provincial significance, and many are home to some of Canada's species at risk.
You are strongly advised to seek professional advice concerning your own tax situation.