Taxation incentives for conservation covenants

A variety of taxation incentives to encourage philanthropy and environmental conservation by private landowners have applied in jurisdictions such as the United States and Canada for many years. This article examines the introduction of tax incentives under the Income Tax Assessment Act 1997 (Cth) to encourage the use of conservation covenants by private landowners to provide permanent protection to the environment in Australia. The amendments, which apply to certain types of conservation covenants entered into on or after 1 July 2002, provide for income tax deductions and concessional capital gains tax treatment where a qualifying conservation covenant is created. The legal and policy background to the introduction of the tax concessions in Australia is outlined and the requirements of the relevant legislative provisions discussed. The article raises a number of issues concerning the potential effectiveness of such incentives to facilitate private conservation of biodiversity.