Income Tax Assessment Act 1997



Division 31 - Conservation covenants  

Operative provisions  

SECTION 31-5   Deduction for entering into conservation covenant  

You can deduct an amount if:

(a) you enter into a * conservation covenant over land you own; and

(b) the conditions set out in subsection (2) are met.

These conditions must be satisfied:

(a) the covenant must be perpetual;

(b) you must not receive any money, property or other material benefit for entering into the covenant;

(c) the * market value of the land must decrease as a result of your entering into the covenant;

(d) one or both of these must apply:

(i) the change in the market value of the land as a result of entering into the covenant must be more than $5,000;

(ii) you must have entered into a contract to acquire the land not more than 12 months before you entered into the covenant;

(e) the covenant must have been entered into with:

(i) a fund, authority or institution that meets the requirements of section 31-10 ; or

(ii) the Commonwealth, a State, a Territory or a * local governing body; or

(iii) an authority of the Commonwealth, a State or a Territory.

You must seek a valuation of the change in market value from the Commissioner: see section 31-15 .

The amount you can deduct is the difference between the * market value of the land just before you entered the covenant and its decreased market value just after that time, but only to the extent that the decrease is attributable to your entering into the covenant.


You can spread the deduction over a 5 year period: see Subdivision 30-DB .

For the purposes of paragraph (2)(a), a covenant is treated as being perpetual even if a Minister of a State or Territory has a power to rescind it.

A conservation covenant over land is a covenant that:

(a) restricts or prohibits certain activities on the land that could degrade the environmental value of the land; and

(b) is permanent and registered on the title to the land (if registration is possible); and

(c) is approved in writing by, or is entered into under a program approved in writing by, the *Environment Minister.


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