A conservation easement (or conservation restriction) is a
legal agreement between a landowner and a land trust or
government agency that permanently limits uses of the land
in order to protect its conservation values. It allows you
to continue to own and use your land and to sell it or pass
it on to heirs.
When you donate a conservation
easement to a land trust, you give up some of the rights
associated with the land. For example, you might give up the
right to build additional structures, while retaining the
right to grow crops. Future owners also will be bound by the
easement's terms. The land trust is responsible for making
sure the easement's terms are followed. The landowner keeps
the title to the land, but donates his or her development
rights to a land trust. In exchange, the land trust agrees
to enforce the easement "in perpetuity.Conservation
easements offer great flexibility. An easement on property
containing rare wildlife habitat might prohibit any
development, for example, while one on a farm might allow
continued farming and the building of additional
agricultural structures. An easement may apply to just a
portion of the property, and need not require public access.
A landowner sometimes sells a conservation easement, but
usually easements are donated. If the donation benefits the
public by permanently protecting important conservation
resources and meets other federal tax code requirements--it
can qualify as a tax-deductible charitable donation. The
amount of the donation is the difference between the land's
value with the easement and its value without the easement.
Placing an easement on your property may also result in
property tax savings.
Perhaps most important, a conservation easement can be
essential for passing land on to the next generation. By
removing the land's development potential, the easement
lowers its market value, which in turn lowers estate tax.
Whether the easement is donated during life or by will, it
can make a critical difference in the heirs' ability to keep
the land intact.
The newly passed Pension Reform bill helps family
farmers, ranchers, and other moderate-income landowners get
a significant tax benefit for making the charitable donation
of a conservation easement, restricting future development
of their land to protect an important public resource.
