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The existing property market does not differentiate between land with a high conservation value and land with little or no conservation value. In fact, often, properties with higher environmental values (e.g. grazing properties with denser vegetation coverage) have a lower market value as production may be constrained.
Revolving funds operate in a defined market niche—private properties with high nature conservation values owned by a section of the community with the passion and the funds to purchase land and commit to preserving its environmental values.
Western Australia’s BushBank is a revolving fund to secure a stock of private land with high biodiversity conservation values. The fund secures the land’s value via conservation covenants. BushBank is one of several revolving conservation funds operating in Australia. Some conservation funds have operated for many years, and include:
- The Nature Conservation Trust of New South Wales
- Trust for Nature, Victoria
- BushBank, South Australia
- Queensland Trust for Nature.
With a primary focus on native vegetation, BushBank Western Australia also purchases properties that sustain important waterway and wetland values. During 2003–04, BushBank successfully negotiated 26 covenants over 13 properties, covering over 2,700 hectares. This brought Bushbank’s total stock to 132 covenants over 76 properties covering almost 8,000 hectares.
Established in 2001, BushBank Western Australia is administered by the National Trust of Australia (WA). As with all revolving funds, BushBank has identified a market niche—private properties with high nature conservation values owned by a section of the community with the passion and funds to purchase land and committing to preserve its environmental values.
BushBank Western Australia started with initial seed funding of $1 million from the Australian Government’s Natural Heritage Trust and $1 million from the Western Australian Government. Bushbank’s budget is augmented by private donations of land and money.
BushBank works in a revolving process that:
- identifies and purchases properties with high conservation values
- negotiates a legally enforceable, permanent conservation covenant with the National Trust of Australia (WA)
- sells the covenanted properties to conservation-minded buyers
- provides assistance to new owners with access to expert advice, support and (in some cases) incentives.
On completion of this cycle, the sale proceeds are returned to the fund so that the cycle can be repeated.
BushBank purchases land with the following characteristics:
- areas of native vegetation with high conservation values to secure the future of poorly represented ecosystems
- land adjacent to, or close to, areas with high or strategic conservation value to create broader conservation benefits, for example to connect important bushland remnants, or as a buffer for a national park to create broader conservation benefits.
In some cases, BushBank purchases partially cleared land, places a covenant on the areas with high conservation values, subdivides the land, and then on-sells the cleared portion for farming and on-sells the covenanted area to sympathetic purchasers. This enables a broader range of uses from on-sold properties.
In other cases, cleared land in a strategic location may be purchased for revegetation to establish a corridor of native vegetation between two important bushland remnants.
In choosing properties, BushBank applies criteria such as biological diversity, the presence of rare and endangered species, disturbance levels, the size and shape of the land parcel, the presence of weeds or pest animals and the management effort required.
Sometimes BushBank also serves as a vehicle for people to donate land of high conservation value. BushBank offers the donor security that the land will be permanently protected. Donations help to grow the BushBank revolving fund—after covenanting, BushBank can sell the property to an appropriate buyer and add the sale proceeds to the revolving fund.
A conservation covenant is a statutory agreement between a landholder and another party placing restrictions and conditions on future land use.
Most Australian jurisdictions allow for statutory conservation covenants. Under the National Trust of Australia (WA) Act 1964, BushBank is able to:
- negotiate an agreement between a landowner and the trust to protect and enhance the natural, cultural or scientific values of the land
- formally register the agreement as a covenant on the property, binding all future owners to the agreement.
BushBank’s conservation covenants are statutory agreements, which are permanent and legally enforceable, unlike common law covenants and planning schemes. Conservation covenants must be entered into voluntarily and the content of the covenant is determined by a process of negotiation between BushBank and the owner of the property.
Both BushBank and the Department of Environment and Conservation, provide guidance to landholders about the covenanting process and advises on allowable land uses under the covenant.
Under the National Trust of Australia (WA) Act 1964, it is only possible to remove or amend a Conservation Covenant:
- by mutual agreement between BushBank and the owner
- via court action resulting in a decision by the Supreme Court.
Under the National Trust of Australia (WA) Act 1964, conservation covenants are limited to preventing future land clearing—they cannot place management obligations on current or future landowners. Therefore, BushBank often seeks to link the owners of covenanted properties with state and Australian government agencies and funding programs to provide advice and financial assistance for the ongoing management of covenanted land.
When selling covenanted land, landowners are obliged to inform the purchaser of the covenant. The National Trust (WA) must also be informed of the sale. BushBank contacts the new owners and establishes a new working relationship.
All donations of land or money to BushBank are tax deductible. Australian taxation law gives favourable tax treatment to land under a perpetual conservation covenant, provided the landholder enters into the covenant with a government agency or an approved not-for-profit organisation. Two types of tax benefits apply:
- once a perpetual conservation covenant is agreed, any resulting decrease in the value of the land can be claimed as a one-off income tax deduction by the landholder, spread across a five-year period. Changes to the value of the property require assessment by the Australian Taxation Office.
- as a conservation covenant transfers a legal right from the landholder to an entity, such as BushBank, Australian taxation law recognises that the landholder has suffered some loss in the value of their land as a result. Where the covenanted land is (i) part of a business, and (ii) qualifies as an active business asset under taxation law, landowners can apply for various small business capital gains tax concessions. These concessions can reduce, or even eliminate, capital gains tax liability.
Western Australian law does not provide special treatment for local government rates on covenanted lands. Elsewhere, some local governments, such as the Macedon Ranges Shire in Victoria, offer a rebate of up to 100% for rates on land protected under an endorsed conservation covenant.
Biodiversity-oriented revolving funds such as BushBank have established a clear niche in the conservation of private land with high conservation values. Revolving conservation funds have significant potential to contribute to regional or state nature conservation strategies.Developing productive networks with organisations such as BushBank can add value to publicly funded biodiversity programs.
Revolving conservation fund models can complement regional bodies’ objectives. Options include:
- using a revolving fund model directly, if land ownership is possible under existing institutional arrangements, or indirectly via co-investment with a revolving fund organisation, or
- working with third-party revolving-fund managers, such as BushBank, providing input to the selection of properties and the coordination, implementation and funding of on-ground rehabilitation activities.
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