Ecological gifts provide tax breaks

Habitat loss and degradation are the greatest threats to biodiversity in Canada today. Many key habitats, from marshes to grasslands, are found on private property. Landowners play a vital role in their conservation. Thanks to Environment Canada’s Ecological Gifts Program, with its unique tax advantages, more Canadians can leave a legacy for tomorrow and receive a tax break today.

Here’s what you need to know:

• ecogift donations are not subject to the usual income limits (usually 75% of income) in calculating the income tax credit (for individuals) or deduction (for corporations);
• ecogifts made after May 2, 2006 benefit from the elimination of the normal capital gain realized on disposition of the property—currently 50% of the capital gain for non-certified gifts or sales of land is included in taxable income;
• Environment Canada issues a Statement of Fair Market Value certifying the gift’s value after the gift is made, which the donor submits with the income tax return;
• potential donors who want certainty about the value of their intended donation can request that Environment Canada issue a Notice of Determination of Fair Market Value before the donation is made;
• Environment Canada reviews and approves charitable recipients to ensure such organizations are dedicated to protecting Canada’s natural heritage;

• donors worried about their cherished lands can be confident that income tax penalties can be imposed on charitable and municipal recipients of ecogifts who dispose of title or make a change of use without Environment Canada’s prior authorization;
• making an ecogift can help eliminate potential family disputes over what to do with the land following the death of the owner; and
• an ecogift involving certain partial interests may reduce the property tax burden.

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