Conservation Options for Landowners
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Conservation Options for Landowners As a landowner, you may wish to conserve for the future the qualities which make your property special. The method you choose to do this could depend on many things, including the type of property you own, your tax situation and the extent to which you want to continue to be directly involved in taking care of your land. The following are some options available to property owners for creatively protecting New Brunswick's landscapes. Representatives of the Nature Trust of New Brunswick will be pleased to speak with you in more detail about any of these options :
Donating land to a conservation organization such as the Nature Trust may be something that you have considered. If so, please contact the Nature Trust to discuss the details of your proposed gift. If accepted by the Nautre Trust, your property will be managed with special regard for the natural values which make it significant. You will also receive a tax receipt for the full market value of the property. Your accountant can advise you of the full impact of your donation. When donating property, it is important to bear in mind that owning property costs money. For this reason, the Trust encourages donors, if able, to consider providing a stewardship endowment to be set aside for the future management and maintenance of the land. This may seem like an awful lot to ask, after all you are donating your land, a generous gift by any measure. However the Nature Trust must ensure it has the resources to properly maintain the values that make your natural area special. The amount will depend on the charateristics of the land and the management demands anticipated. Donors may also want to consider donating lands which can be sold by the Trust to raise funds for acquiring more important natural areas. In these cases, it may be possible for the Trust to retain a conservation easement on the property to ensure a measure of continuing protection of natural and open space values, where justified. Of course, these gifts would be eligible for charitable tax receipt. If you wish to retain ownership of your property during your lifetime, and also ensure its protection for the future, you may wish to name a conservation organization such as the Nature Trust in your will. If you are considering this, we request that you discuss your possible bequest with us before including it in your estate planning. This way the Trust will be able to make sure we can fulfill any express wishes you may have with respect to the land and its management. If you are making decisions about your will, you should know that it may be possible to bequeath your property to your heirs, yet to ensure that the land is permanently protected according to your directions. The Nature Trust can be your partner in attaching a conservation easement to your deed, and in overseeing its enforcement. Life estates are different from gifts in a will, and are a creative option if you wish to continue to live on your property while at the same time ceding it for conservation purposes. Also called "remainder interests'', life estates are arrangements whereby a landowner may give his or her property to an organization such as the Nature Trust, while retaining the right to live on or use the property for the balance of his or her lifetime. There are potential tax advantages to this arrangement, but they will generally be smaller then with an outright donation of land. Occasionally the Nature Trust raises funds to purchase lands it wishes to protect. In these cases, the Trust may seek to buy a property at a bargain sale price, that is, below market value. The balance of the price is "paid'' in the form of a tax receipt, valid for the difference between the appraised market value of the property, and the actual price paid. For some individuals this can be an attractive option: landowners can protect their land and also realize both income and a tax advantage. It is possible for non-residents to make gifts of land or conservation easements in New Brusnwick to a land trust. Under certain circumstances, there can even be tax benefits for donors, although this is usually not the main motivation for the gift. The Nature Trust of New Brunswick has US 501 (c) (3) charitable status. This means that gifts to the organization are deductible for US tax purposes to the extent that the donor has Canadian-source income. Because of the Canada-US tax treaty, gifts made through a will (bequests) are deductible in calculating US estate tax, even if the donor has no Canadian income. In the past, groups like the Nautre Trust have relied on an intermediary (a US charity like The Nature Conservancy) to help with land donations by non-residents. Donations of land are made to that group, a tax receipt is issued for use against the donor's US income and no Canadian capital gains tax is levied. The US internediary then transfers the land to the Nature Trust of New Brunswick, which owns and manages the property well into the future. While the process can be long and complex, don't let that discourage you. Many non-residents have succesfully completed land donations to Canadian land trusts; the Nature Trust of New Brunswick has seven such gifts so far. Feel free to speak with us about your situation and the land you want to protect. Sometimes land offered to a land trust for donation can be demonstrated as being ecologically sensitive (due to the presence of rare species or unique habitats, for example). Environment Canada's Ecological Gifts program uses provisions of the Income Tax Act to provide donors of such "ecogifts'' with enhanced tax benefits. The program's requirements may be more complex than for a regular donation of land. Ecogifts require provincial certification of ecological sensitivity. The appraisal report must also be reviewed by a panel before Environment Canada will verify the donation's fair market value. Once certified, donors can rest assured that the market vallue of their donation has been accepted by government, and, more importanly, they end up with more money in their pockets than if their gift had been a regular gift of land. Why? Donors of ecological gifts pay less in capital gains tax (25% of the gift' value is taxable, compared to 50% for regular donations). Also, the restrictions on the amount of the gift that may be used in a given year are lifted for ecogift donations. That is, the entire value of the gift may be used against the donor's income tax. This value may be carried forward for up to five years. The Nature Trust handles the ecogift application process for donors, but we may ask for help with appraisal and ecological certification costs. As with any potential donation, we strongly advise landowners to seek professional tax advice before embarking on this process. For more information on the Ecological Gifts Program please visit : www.cws-scf.ec.gc.ca/ecogifts Conservation Development or Limited Development This refers to the practice whereby a conservation agency such as the Nature Trust accepts property with the intention of setting aside the ecologically sensitive portions of the property, while providing for a limited amount of development on the less sensitive portions. Working closely with the donor, the Trust would identify the most important site attributes (wildlife habitat and corridors, for example, or scenic vistas) to be protected, and other portions of the site that might support a limited amount of development. Generally this will require careful analysis of the site and creation of a detailed plan. The plan would denote the extent of ecologically significant areas to be protected through means such as a conservation easement or outright ownership by an agency such as the Trust. Areas slated for limited development could then be sold to raise revenue for conservation projects in other areas. Although this method can be rather complex, it may be valuable in urban fringe settings where land prices make management for conservation and open space values an expensive proposition. Leases have been used by the Nature Trust in the past to protect an important fen and bog area, as well as an urban wetland home to an uncommon species of treefrog. If you choose not to make a commitment to donate a piece of property to the Nature Trust at this time, a lease may be a good idea. Lease arragements can give the Trust exclusive access rights to properties for the terms of the lease, which can mean that a certain amount of protection is provided to sensitive aspects of the site. This approach may also be used by the Trust when there is no need or possibility for a more permanent arrangement to ensure protection. A conservation easement is a legal agreement between a landowner and a third party ( e.g. the Nature Trust) whereby certain rights (such as the right to harvest timber or subdivide the property) are relinquished for the purpose of ensuring the future protection of the land. The land remains in private ownership. A conservation easement is worked out between the landowner and the organization which will hold the easement. The easement is officially registered on the title, thereby ensuring that future owners will be bound by the provisions it contains. The holder of the easement must monitor and, if need be, enforce the provisions of the easement agreement. The landowners retain the title to their land, and may bequeath it or sell it, knowing it will still be protected when it passes from their ownership. They also continue to live on the land and use it, within the legally defined terms of the easements. Also, easements may help prevent potential disagreements when property is passed to heirs, because they provide a clear definition of conservation goals and desired uses of the land. Conservation easements are flexible, and can be tailored to meet the particular requirements of each property and owner. Some easements allow for limited development and/or resource management; others require that the land be held "forever wild'' or be open for limited public access. The Nature Trust can provide examples of typical easements for your examination, and would be pleased to discuss the options with you. If you want to ensure that your land is protected, but you do not want to donate your property or use other options for formal protection, you can act on your own to practise good land stewardship. Being a good steward of your land means knowing how your property fits into the wider system of which it is a part, and providing what it needs for its continued ecological well-being. With forethought and understanding, landowners can care for, enhance, and rehabilitate their properties. Sometimes the best approach is to let natural processes take place with a little interference as possible. The Nature Trust may be able to provide assitance in establishing conservation goals and objectives for your property. We can help by identifying the critical areas for conservation on your property, and suggesting management plans which keep a balance between protecting the land and using it respectfully. Some people may prefer to give donations of cash or securities to the Nature Trust, to help it continue its land conservation and stewardship work. These gifts enable the trust to protect unique natural areas which may be in your community. As the focus of the Trust is on those lands with rare or significant natural assets (and we have identified many of these in the Province), your gift will assist us in securing targeted properties. It will also allow us to undertake the ongoing monitoring and management needed for good stewardship of the land once secured. If you would like to direct a cash or securities donation toward a particular goal, we would be very willing to discuss your desires and try to coordinate our activities with your interests. |
