Written by Pat Snyder
Conservation easements are a boon to landowners, which allow them to lower their tax liabilities and conserve valuable natural and historic resources. Conservation easements have gained in popularity in the last few decades; the total number of acres protected under conservation easement by 2015 was 21 million acres, an 834 percent increase from two million acres in 1995 (source: National Conservation Ease Database 2020). This number continues to grow as more landowners learn how conservation easements may be of financial benefit, create legacy opportunities, and how these tools can be used as a long-term solution to protect and preserve natural resources that benefit the communities where they are located.
Let’s look at what conservation easements are, and why—if you own land that holds value—it makes sense to investigate the benefits landowners stand to gain from conservation easements.
What is a conservation easement?
A conservation easement is a legal agreement that transfers certain rights, such as the right to develop a property, and grants the right to enforce that agreement to a land trust or government agency. Conservation easements are almost always permanent. The land itself is still privately owned and can be sold or used in other ways, within the confines of those restrictions.
The land being placed in a conservation easement must have some public benefit and must be accepted by the land trust, but the easement does not always require public access. Normally the conservation will be focused on protecting one or more of the following: important plant and wildlife habitat, water quality, forest stewardship and preservation, scenic enjoyment, and/or historically important land.
Most of the time, the easements are donated by landowners and in return, the owner receives a tax incentive for the donation. In some cases, such as land that has very sensitive natural resources, where public use is a significant conservation objective, a trust may decide to buy the land or pay for an easement instead of receiving it through a donation.
Why donate a conservation easement?
Landowners choose to donate conservation easements for several reasons such as protecting the land from development and protecting natural resources. Some want to leave behind a legacy that will remain in perpetuity. Additionally, federal tax benefits for donations may be substantial and allow for a landowner to offset the value of the donation by taking a deduction of up to 50% of their adjusted gross income for up to 15 years until the donation value is met.
How do you set up a conservation easement?
To fully understand this topic and its applicability, it will require consultation with many professionals including some or all the following: your local land trust organization, land brokers, land and ecological planners, appraisers, attorneys, accountants, surveyors, fauna and flora consultants, and other professionals. The first place to start is often with a local land trust to discuss the property and landowner goals, to see if there is potential for a conservation easement and to identify what the process is for putting an easement in place.
From there, further evaluation of the property and negotiation of the easement terms will need to take place. State laws differ on the formalities that need to be adhered to when you donate a conservation easement, so it is always recommended to hire the services of an attorney to make sure the grant covers nothing more or less than what you want to donate and is compliant with all state and federal laws that are applicable in your locality. And, if the tax benefits are important, the landowner will want to discuss with their tax advisor to learn how the donation might financially benefit them before agreeing to any easements.
In short, conservation easements are legal agreements through which landowners transfer certain rights to a land trust or public agency to meet altruistic, legacy, conservation, or land management goals and they may receive federal and/or state tax benefits for these actions which protect privately held wildlife habitat, water quality, and forests.
Pat Snyder is a Managing Broker with National Land Realty, the nation’s fastest growing land brokerage company.