“It’s just for nature to do what nature does,” Vicki Schmolka of the Land Conservancy for Kingston-Frontenac-Lennox & Addington told an information session Sunday at Piccadilly Hall. Through the work of more than 30 volunteers, LC KFLA currently owns six properties and holds two conservation easements, totaling 220 hectares, providing habitat for 19 species at risk.
“Our goal is to protect nature,” she said. “Protecting nature on your land forever has to be your goal.”
She said people with land that don’t expect to ever use it or give it to their children can insure that it won’t ever be subdivided by donating all or part of it to the Conservancy. They can enter into a conservation easement agreement, under which the land remains part of their property, but the owner agrees to keep it in a natural state (they can still, for example, cut firewood on it, but only for their personal use), and future owners will have to abide by that agreement. The owner retains a portion of the land (usually where their house is), which they can essentially do what they want with. The owner still has to pay municipal property taxes on it, but usually less than they were paying if MPAC agrees that the fact the land can never be subdivided lessens its assessment value.
But, having said that, Ray Kinoshita of Grant Thornton accountants pointed out that there can be significant savings to be had by such arrangements, particularly for U.S. owners who may be unaware of Canada’s capital gains laws.
“Canada’s capital gains tax came in 1972,” he said. “Even by giving the property to somebody, you acquire tax liability.”
Kinoshita gave an example of how a property purchased in 1962 for $30,000 could sell for $1 million now, resulting in a capital gain of $665,000 when improvements, proceeds and selling costs are factored in.
There is also the charitable contribution factor, he said.
“The value (in donating to a land trust) is in the charitable receipt, which gets you a tax credit which can be spread out over 10 years,” he said.
Of course, each situation will be different and you’ll need to talk to an accountant to see how you can benefit, but if you might consider donating all or part of your land, entering into an easement agreement or just want to help, contact the land conservancy on their website http://www.landconservancykfla.org.