Tuesday, January 10, 2012
US LANDOWNERS IN CANADA NOW ABLE TO DONATE CONSERVATION PROPERTY
If you are a boater on Georgian Bay, then you know what a great privilege it is to drop anchor in a secluded cove surrounded by an unspoiled wilderness landscape of windswept pines and sculpted granite landscape. When you see these beautiful undeveloped vacant islands and mainland coves you have to recognize that it’s vacant for a reason and being permanently or temporarily protected in some manner:
1/ Private deeded land that has been left undeveloped - there is increasingly less of this every year and in all likelihood it will be developed at some point
2/ First Nations reserve land – which may or may not be developed at some point in time
3/ Federal or Provincial Park lands – which will probably never be developed but may host additional visitor infrastructure over time
4/ Crown Land – will hopefully get converted to Park land over time ... but with no guarantees
5/ Land Trust property that has been donated by deeded land owners to be preserved as conservation land into perpetuity
The Georgian Bay Land Trust www.gblt.org currently manages 28 properties comprising of some 1200 acres. It acquires property mainly by donation but in some instances it will raise money to buy select properties. They are currently working on 76 properties for preservation. For many landowners and the families involved with the property have a multi generational attachment to the land. As families grow and disperse over time it is common that the land owners at some point want to ensure preservation of the property because of their love and attachment to the land and the memories that go with it. That Georgian Bay island or main land acreage may often be the one place on earth over all others that they are grounded to as a family and the place they feel closest to in terms of emotional attachment. They want to see the property live on for many generations just the way they remember it and they want to benefit the flora, fauna and wildlife that were part of their experience with the property.Of course the land donations can also trigger favorable tax treatment and have some financial advantages for the landowner in most cases.
Historically many of the landowners in the Georgian Bay archipelago are US owners. It’s just one of those things, that US citizens have been coming to Georgian bay for vacations since the early 1900’s and many fall in love with the area and made the move to invest in property. Many of them would come to rustic lodges for the summer season by steamer - after you do that for several seasons you want to own a piece of the Georgian Bay beauty and lifestyle. And chances are friends come to visit and they want the same. Orville Wright was one of those people, however eventually the property left the family. There are many families that couldn’t bear the thought of their Georgian Bay property falling into other hands that may over develop the property or have it end up in some future use where the natural surroundings would be disrupted. We think of Georgian Bay as being rugged granite, but everything that takes hold on that granite in unbelievably harsh conditions has to struggle for decades to persevere and survive. It is a very fragile environment in many ways and worth protecting, because there is no where else in the world with the stark beauty and rich history of the Georgian Bay 30,000 Islands.
Recently Canada & the USA facilitated the ability for US landowners to donate their land for conservation. It took eleven years to hammer through the red tape. In the past the tax impediments facing US citizens owning Canadian land prevented them from donated it. Canadian conservation agencies like the Georgian Bay Land Trust found foreign ownership to be an obstacle to preserving the land, other than buying the property outright. This is because if a US citizen donated the land to a US charity they paid the accrued Canadian capital gains tax and if they donated it to a Canadian conservation agency they received no US tax deduction.
A US non profit organization was formed called the American Friends of Canadian Land Trusts (AF) www.nsnt.ca/af hosted by leading conservation professionals from both USA and Canada with the mandate to remove tax obstacles for donated land. Americans can now donate Canadian land by conservation easement over that land and donations are US income tax deductible and are also exempt from Canadian capital gains taxes. The American Friends organizations also gets donations from Canadian and US interests that allows them to operate, craft donation agreements through Canadian partners (like Georgian Bay Land Trust) and promote American donation of conservation properties.The land donations are made through the AF to appease the IRS regulations on tax deductions from foreign property. The transaction fee draws about $3500 in legal/admin costs to the US donor or Canadian partner (whoever assumes the cost). It happens in steps 1/ qualification 2/ proposed land conservation agreement and then three project phases 1/ Inquiry & Feasibly Assessment 2/ Due Diligence 3/ Closing . All are involved legal processes that are guided by AF and the Canadian conservation partner. The lands must also be free from risk of mineral development and the partner taking the donation must be determined by the IRS to be a publically supported charity under the Canada – US income tax treaty recognizing that qualified Canadian Charities are equivalent to US organizations in some instances.
So here’s why you might donate land or cash to the Foundation or Trust:
- you are preserving land and wildlife in it’s natural state in a fragile environment
- cash donations are tax deductible as a donation
- land donations are also tax deductible and attract no capital gains for qualified situations US or Canadian
- cash donations allow the trust and foundations to function securing more conservation lands
- you cannot depend on government to pick up and secure available unique private lands in the public interest if they become available (although it does happen on occasion when Park lands ajoin)
- if you are a boater consider that you are preserving wild places you can anchor at and enjoy unspoiled views
- most would get some satisfaction in knowing that that their children or their grand children and great grand children will still have unspoiled places to see when they cruise the Bay
If your donating to other worthy causes ... and Georgian Bay is one of your favorite places, consider donating to the Georgian Bay Land Trust. Every bit helps. Boating Georgian Bay will be adding GB Land Trust to the organizations it donates to this year.