Grant Programs and Funding

Conservation Covenanting Program - Application for Ministerial Approval

Introduction

The Taxation Laws Amendment Act (No. 2) 2001, assented to on 1 October 2001, amends the Income Tax Assessment Act 1997 to provide concessional tax treatment for land owners entering into certain types of conservation covenants. Basically, the legislation provides for two types of tax concessions - an income tax deduction for any decrease in land value (where that decrease is over $5,000) as a result of entering into a conservation covenant, where the land owner receives no capital payment for entering into it; and, Capital Gains Tax (CGT) treatment to any capital payment received for entering into a conservation covenant.

Under the legislation, a 'conservation covenant' is defined as a covenant that:

• restricts or prohibits the land owner from certain activities on the land that could degrade the environmental value of the land;
• is permanent and binding on current and future land owners (by way of a registration on the title to the land where possible); and
• is approved by the Minister for the Environment and Heritage (including those entered into under a program approved by that Minister).

While a conservation covenant or covenanting program may be approved by the Minister, there are other requirements which need to be met before a conservation covenant would be eligible for tax concessions. These other requirements are set out in the legislation and explanatory memorandum, both of which can be found at http://law.ato.gov.au/atolaw/view.htm?docid=NEM/SM200118/NAT/ATO/00003. Land owners or covenanting organisations wishing to utilise the new provisions should seek appropriate advice from relevant sources (e.g. Australian Tax Office, tax accountants) in order to fully understand the implications of the legislation.

While the process for Ministerial approval includes the opportunity to approve individual covenants, it is primarily designed to approve covenanting programs. Covenants entered into under approved programs will then be eligible for tax concessions (where they meet other relevant criteria). Individual covenantors seeking Ministerial Approval should contact the Department of the Environment & Heritage on 6274 2333 for further information. Applicants seeking approval of programs are required to fill out the Application Form and submit information as outlined in the attached Covenanting Guidelines. Applicants who gain Ministerial approval will receive an approval certificate. The approval certificate will be valid for three years after which the approval certificate may be renewed subject to a review of operations.

The Covenanting Guidelines may be subject to review from time to time. Stakeholders will be informed of proposed changes 12 months before these changes are incorporated.

Download the Application Form

The Application Form is available as a PDF file. You will need Adobe Acrobat Reader installed on your computer to view it.

• Download Conservation Covenanting Program - Application Form (application.doc - 312 KB)

If you are unable to access this form, please contact the Department of the Environment and Heritage to organise a suitable alternative format.