Tax concessions for landowners who enter into conservation covenants
Tax concessions are available to land owners who enter into conservation covenants to protect areas of high conservation value:
- A land owner who receives some capital proceeds for entering into a conservation covenant on or after 15 June 2000 may qualify for concessional Capital Gains Tax treatment.
- A land owner who does not receive any money, property or other material benefit for entering into a conservation covenant on or after 1 July 2002 may be eligible for:
- an income tax deduction; and
- concessional Capital Gains Tax treatment.
Detailed information about these concessions is available on the Australian Taxation Office (ATO) web site. Useful overviews and introductory fact sheets are also available on the ATO site:
- Claiming conservation covenant concessions
- What constitutes a 'material benefit' for entering into a conservation covenant?
- Land owners should seek advice from authoritative sources (e.g. Australian Tax Office, tax accountants) in order to fully understand the requirements of the Income Tax Assessment Act 1997.
- The covenant must be entered into between the land owner and:
- a Deductible Gift Recipient (these include funds listed on the Register of Environmental Organisations and environmental organisations listed in the Tax Act); or
- the Commonwealth, a state, a territory or a local governing body or an authority of the Commonwealth, a state or a territory.
- The covenant must be:
- approved by the Minister for the Environment (contact the Department of the Environment on (02) 6274 1036 for further information); or
- entered into under an approved conservation covenanting program (see Conservation covenanting programs and the Income Tax Assessment Act 1997)
- Where the land owner who enters into a conservation covenant is able to claim a deduction which is $5,000 or more, the land owner can elect to spread the tax deduction over a five year period. The land owner will need to complete an Apportionment Election Form (available on our Apportionment of deductions web page) and return it to the Department of the Environment before lodging their income tax return.