Giving and super

Conservation covenant deduction

The market-value reduction from entering an eligible permanent conservation covenant over land you own.

Reviewed 30 July 2026Income years 2025-26 and 2026-27

Who can claim

This deduction is available to individuals and companies.

  • You own the land and enter a permanent covenant that restricts activities that could degrade its environmental value.
  • The covenant is registered on the land title where registration is possible and is entered under a program approved in writing by the Environment Minister or is individually approved by the Minister.
  • The covenant reduces the land's market value and you receive no money, property or other material benefit for entering it.
  • The market-value decrease is more than $5,000, or you entered the contract to acquire the land no more than 12 months before entering the covenant.
  • The covenant is entered with an eligible section 31-10 fund, authority or institution; the Commonwealth, a state, a territory or local governing body; or an authority of the Commonwealth, a state or a territory.

What you cannot claim

  • A temporary, unregistered or unapproved agreement is not an eligible conservation covenant under Division 31.
  • No deduction arises where the covenant does not reduce the land's market value or a material benefit is received.
  • The combined deductions governed by section 26-55 cannot create or increase a tax loss.
  • Do not also claim the same value reduction under the ordinary gift rules.

How the amount is worked out

Use the Commissioner's section 31-15 valuation of the market-value decrease attributable to the qualifying covenant, then apply the section 26-55 limit. A written election made before lodging the return can spread the deduction across the current income year and up to four following income years. Also calculate CGT event D4; it can happen even where no cash proceeds are received.

Records the ATO expects

  • Land title and ownership record
  • Land acquisition contract and date
  • Registered covenant
  • Eligible-recipient evidence
  • Program or Ministerial approval
  • Commissioner's section 31-15 valuation
  • Spreading election
  • CGT event D4 worksheet

Where this rule comes from

Primary source: Income Tax Assessment Act 1997 section 31-5 (Section 31-5). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.

Supporting sources:

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