Conversation Easement

The conservation easement must be perpetual in order to be eligible for the federal tax deduction. PDR easements are also irrevocable. Donors of these easements must consider the long term because each succeeding owner will be bound by the same restriction throughout the duration of the easement, which is allegedly going to last for a thousand years or more. Do you, as the landowner, really wish to preserve that particular piece of property for future generations to use? The formation of a conservation easement results in the creation of two distinct sets of property rights, with the property owner’s rights forever being subordinate to those of the conservation easement holder. The ability to develop your property may not have much worth today, but it may have a lot of value in the future. The effect of such an easement on potential owners or successors must be carefully and thoughtfully considered. Additionally, it’s crucial to keep in mind that the value of an easement is based on how much the value of the land it pertains to has decreased; the greater the loss, the more valuable the easement. This decline in land value may not be desirable to individuals who own investment property, and it may be difficult for those who encounter difficult circumstances and need to sell their now-depreciated land. Conservation easements have transaction costs as well as ongoing maintenance costs. Land trusts may request a stewardship fee in addition to the donation of the easement, which provides the trust with operating funds to oversee and enforce the easements. These tasks are more expensive on land that is still being farmed. Before committing permanently, it’s vital to weigh all of your options because the specific terms could differ significantly between organizations.

A conservation easement is a non-binding legal arrangement that, once in place, places long-term restrictions on how the land can be used in order to preserve its ecological significance. A conservation easement is one of the options available to safeguard a piece of land for the benefit of future generations. This type of easement is also sometimes referred to as a conservation restriction or a conservation agreement.

Making a conservation easement may offer tax benefits in conjunction to the assurance that your land will be kept in its current use or state for the duration of human history and possibly direct reimbursement from initiatives like PDR. In order to encourage land conservation, Congress created an ongoing conservation easement tax incentive in 2015. As a result, donations of conservation easements are now eligible for a philanthropic deduction of up to 50% of the donor’s yearly income. The deduction can be used by the donor after a 15-year carryover period. Additionally, the property owner can continue use the land even though it is subject to a conservation easement and sell or donate all or a portion of it. These easements are frequently used to preserve agricultural property, but they must be carefully drafted so that the farm can adapt to shifting conditions. There are no restrictions besides the easement’s application to any sold property. The precise program and easement deal will, of course, regulate the specifics of any changes in use, subdivision, or sale. You should carefully analyze any such agreement to make sure that its restrictions meet your expectations.