Conservation Easement

Conservation Easement

A conservation easement is a legally binding agreement between a landowner and a government agency or land trust. This agreement restricts certain uses of the land in order to protect its conservation values. Conservation easements are a powerful, flexible tool used by landowners to voluntarily protect natural resources while retaining private ownership. These agreements can help preserve wildlife habitats, scenic views, historical landmarks, and agricultural lands. By entering into a conservation easement, a landowner can secure significant tax benefits through income tax deductions and potentially reduce estate and property taxes.

Examples

1. Zachary’s Scenic View Protection: By donating a conservation easement, Zachary agreed never to develop certain land that has a scenic view. In return, he received an income tax deduction for this limitation. Zachary had the conservation easement professionally appraised to claim the tax deduction.

2. Agricultural Land Preservation: Jane owns a large farm that has been in her family for generations. To ensure the land remains agricultural forever, she placed a conservation easement on the property, restricting any future commercial or residential development. In exchange, she received significant tax benefits that helped with her ongoing farm operations.

3. Wildlife Habitat Protection: A landowner partners with a local land trust to place a conservation easement on their forest land, ensuring the preservation of vital ecosystems for endangered species. This prevents future logging or development, maintaining the area as a habitat sanctuary.

Frequently Asked Questions

1. What is the primary purpose of a conservation easement?

   • The primary purpose is to preserve and protect the conservation values of the land, such as wildlife habitats, scenic views, agricultural use, and historical sites.

2. Do I lose ownership of my land if I enter into a conservation easement?

   • No, you retain ownership and can continue to use and live on the land. However, certain uses are restricted according to the terms of the agreement.

3. Can a conservation easement impact the resale value of my property?

   • Yes, it can reduce the market value since the land use is restricted. Nonetheless, this may be offset by tax incentives and the preservation’s intrinsic value.

4. Who can enforce a conservation easement?

   • The conservation easement is typically enforced by the government agency or land trust that holds the easement.

5. Can a conservation easement be terminated?

   • Generally, conservation easements are permanent. Termination is rare and typically would require a court process proving changed conditions making the easement’s purposes impossible or impractical to achieve.

Related Terms

• Land Trust: A non-profit organization that actively works to conserve land through direct ownership or conservation easements.

• Appraisal: The process of evaluating the easement’s impact on property value, often required to claim tax benefits.

• Conservation Value: The worth of land based on its natural, scenic, agri-cultural or historical significance.

• Estate Tax: Tax imposed on the transfer of a deceased person’s estate, potentially reduced by the value of the conservation easement.

Online Resources

1. The Land Trust Alliance

   • Website
   • Provides comprehensive information on conservation easements and a directory of land trusts.

2. IRS Publication 561: Determining the Value of Donated Property

   • IRS.gov
   • Official guidelines for appraising conservation easements for tax purposes.

3. National Conservation Easement Database

   • NCED
   • A nationwide database for tracking and managing conservation easements.

References

• The Internal Revenue Service (IRS). “Publication 561: Determining the Value of Donated Property.” IRS.gov.
• Land Trust Alliance. “Conservation Easements: An Introduction for Private Landowners.” Land Trust Alliance.

Suggested Books for Further Studies

1. “Conservation Easement Handbook” by Elizabeth Byers and Karin Marchetti Ponte
2. “Saving the Ranch: Conservation Easement Design in the American West” by Tony and Dorothy Thatcher
3. “Conserving America’s Countryside: A Guide to Rural Conservation” by Samuel N. Stokes, A. Elizabeth Watson, and Shelley S. Mastran

Real Estate Basics: Conservation Easement Fundamentals Quiz