WHAT PROTECTION OPTIONS CAN THE LONG POINT BASIN LAND TRUST OFFER?
1. CONSERVATION EASEMENTS : An easement is a legal tool that can be used to protect conservation values without selling a property. The Long Point Basin Land Trust is willing to explore the use of easements for conservation on properties that have been identified as having important natural heritage values.
> more information on Conservation Easements
2. DONATIONS OF PROPERTY: There are many ways in which property donations can be structured. The Long Point Basin Land Trust will work with and owners to meet their needs.
> more information on Donations of Property
3. SALES TO THE LAND TRUST : Long Point Basin Land Trust will consider purchase of exceptional properties depending on availability of funding.
> more information on Sales to the Land Trust
N.B. Independent legal and fi nancial advice should be sought before making a gift or entering into an agreement that may have tax or legal implications. Your decisions should be made only after careful consideration and professional advice.
CONSERVATION EASEMENTS
A conservation easement is a legal agreement between a landowner and a qualified organization, such as the Land Trust, that holds and monitors the agreement. An easement is a covenant registered on the property title and is binding for present and future landowners. An easement helps protect conservation values that a landowner and the holder of the agreement have mutually agreed should be protected. The type and amount of development that may take place on a property, the restricting of tree cutting, the preservation of hedgerows, the protection of a cold water stream are exam ples of values that could be protected through an easement. Each easement is tailored to fit the needs of the property and the landowner’s directions for its use. The ownership of the property is not affected by a conservation easement. A landowner grants the easement to an appropriate party, such as the Land Trust, that agrees to monitor the management of the land to guarantee that the wishes of the landowner are upheld.
Although the legal document that sets the terms of the easement is carefully crafted to meet the needs of both the landowner and the Land Trust, it can be quite flexible and can be used for a variety of purposes. Easements allow landowners to permanently protect natural areas such as wetlands, riparian areas, forest, or prairies. They can be used to preserve open space including farmland, scenic vistas, and recreational corridors. They may also allow landowners to utilize limited development of a portion of land while preserving the natural or cultural resources on the same tract.
Donation of an easement may result in tax benefits to the landowner in that it can relieve the landowner of certain land taxes and income taxes, depending on their particular circumstances.
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N.B. Independent legal and financial advice should be sought before making a gift or entering into an agreement that may have tax or legal implications. Your decisions should be made only after careful consideration and professional advice.
DONATIONS OF PROPERTY
A. Bequest: The donation of a property to a qualified recipient, such as the Land Trust, at time of death, as provided for in a will, results in the unrestricted use of land by the owner until death, as well as a possible reduction of estate taxes. The disadvantages to the owner are the continued full property tax liability and the loss of income tax benefits for the donation.
B. Outright Donation: All rights to the land are transferred to a qualifi ed recipient, such as the Land Trust, resulting in a income tax deduction for the full, appraised value of the land, and reduced estate taxes, etc. In a less than full value donation, only selected property rights are donated, which may result in tax reductions.
C. Leaseback: Property is donated to a qualified organization, such as the Land Trust, but with the condition that there is a lease granted to the previous owner for the use of the property or part of the property. Such a condition placed on the gift may preclude any tax deduction for the donation for the part leased back.
D. Reserved Life Estate: Property is donated or sold, in whole or in part, to a qualified recipient, such as the Land Trust, with a provision that reserves the right of the owner (and/or specified persons) to use the land, or a portion of it, until death. The owner may claim an income tax deduction for the value of the donation, estate taxes may be reduced and property taxes are levied only on that portion retained for personal use.
E. Ecological Gifts: Donation of certain lands which are recognized as significant under the “Ecological Gifts Programme” of the Government of Canada, may result in greater tax benefits, depending on personal financial circumstances.
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N.B. Independent legal and financial advice should be sought before making a gift or entering into an agreement that may have tax or legal implications. Your decisions should be made only after careful consideration and professional advice.
[White Trillium. Photo: Mary E. Gartshore]
SALES TO THE LAND TRUST
A. A sale at MARKET VALUE realizes full price for the owner but he remains liable for income and capital gains taxes. Non-profit organizations such as the Land Trust rarely can purchase property at full value for conservation purposes.
B. Selling land at a BARGAIN SALE price to the Land Trust yields an income tax deduction equal to the difference between the sale price and the full fair market value of the property, and also lowers capital gains taxes.
C. An OPTION is a contract between a potential buyer of a property, like the Land Trust, and a seller, which reserves the right of purchase to the buyer for an agreed upon price to be paid in a specified period of time. The buyer secures an option in order to gain time to raise funds for the purchase. The option cost is forfeited if no purchase ensues.
D. For protection purposes, a RIGHT OF FIRST REFUSAL is a legal agreement granting a potential buyer, such as the Land Trust, the right (for a limited time) to match any bonafide offer once a property is placed on the real estate market.
N.B. Independent legal and financial advice should be sought before making a gift or entering into an agreement that may have tax or legal implications. Your decisions should be made only after careful consideration and professional advice.
[Jackson Gunn Old Growth Forest. Photo: David Agro]