Ecological gifts provide tax breaks

By Natasha van Bentum | April 7, 2014 | Last updated on September 15, 2023
2 min read

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;

Enlarge System 1 in action

  • 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.

Read more: Tax break today, legacy tomorrow>

Natasha van Bentum