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What is a Conservation Easement?
A conservation easement is a legally binding agreement between a landowner and the land trust that permanently limits development on the land in order to protect specific features and resources (conservation values). Each easement is tailored to reflect the unique qualities of the land and the desires of the landowner. A conservation easement may cover an entire property, or just part of one. Conservation easements may be donated or sold to the CDLT during the landowner's lifetime, or planned in a Last Will and Testament to take place after death.
Who Owns the Land?
The landowner owns the property, but the easement grants the Land Trust the right to manage and protect the identified conservation resources. For example, an easement on property containing rare or valuable wildlife habitat might state that the Land Trust must prohibit any development that would adversely impact that habitat, while one on a farm might specify that the landowner should continue farming and permit the building of additional agricultural structures or roads in order to increase productivity.
What Rights Does the Owner Retain?
The owner retains all rights normally associated with ownership of land, except those that have been explicitly conveyed to the Land Trust in the easement document. The conservation easement does not restrict the owner's right to sell the property or leave it to heirs in a will or trust. However, the easement runs with the land, so future owners are also bound to the terms of the conservation easement. An easement does not grant public access to property unless specifically desired by the landowner.
What Does the Land Trust Do?
Working together with the landowner, the land trust identifies and documents the conservation values of the protected area. Those values are then specifically discussed and protected in the terms and conditions of the easement document. As the easement holder, the land trust prepares a stewardship plan for the property, implements any environmental restoration and enhancement, monitors the easement on a regular basis to ensure the terms of the easement are being respected, and supervises public use of the property (if public use is allowed by landowner). The Land Trust accepts a perpetual responsibility to protect the conservation values of the land, and to enforce the terms and conditions of the easement. If necessary, the land trust takes legal action to enforce the terms and conditions of the easement.
What Are the Tax Benefits?
In order to qualify as a tax-deductible charitable donation, a conservation easement must meet federal tax code requirements. The easement must provide public benefit by permanently protecting important conservation resources. In addition, the easement must be granted to a qualified conservation organization (i.e., a land trust).
For income tax purposes, the value of the donation is the difference between the land's value with the easement and the land's value without the easement. The value of the easement must be established by qualified appraisal. Federal income tax deductions for donations of conservation easements on land owned for more than one year are limited to 30% of your adjusted gross income per year for a total of six years, or until the value of the donation is used. Because the appraised value of the land may be lower after the easement is in place, it can also result in reduced estate taxes if the property is passed on to heirs, reduced capital gains taxes if the property is sold, and in some jurisdictions, lower property taxes.
