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Conservation Easements

What is a Conservation Easement?

Land trusts use a variety of tools to help landowners protect their land. The most commonly used protection methods are purchasing or accepting donations of conservation easements and land.

Conservation Easements
A conservation easement is a voluntary legal agreement between a landowner and a land trust (or government entity) that permanently restricts certain aspects of development to protect the conservation values of the property. Landowners may either donate or sell a conservation easement. When a landowner places a conservation easement on his/her land, he/she maintains ownership and use of the property and can sell it or pass it on to heirs. The land is subject to certain restrictions agreed upon by the landowner and the land trust. For example, a landowner might agree to limit development on his/her property to one residence.

Future landowners are bound by these restrictions as well, and the land trust is responsible for upholding the terms of the easement.

Benefits of Conservation Easements
In addition to the satisfaction landowners get from knowing their land is protected in perpetuity, there are also three potential tax advantages to granting an easement: an income tax deduction; an estate tax benefit; and, possibly, a reduction in property taxes. An easement donation that meets certain federal tax code regulations – that is, one that is perpetual, is given to a qualified conservation organization and is given “exclusively for conservation purposes” can qualify as a tax-deductible charitable gift. (See Internal Revenue Code Section 170(h)(1)). By removing or decreasing a property’s development potential, a conservation easement may also result in the reduction of property taxes in some states and estate tax benefits for the landowner and his or her heirs. (Landowners should consult a tax attorney for more information on the potential tax benefits.)

In order for a landowner to take a tax deduction, an appraiser must value the property at its full development potential. Then, the property is appraised at the value with the easement restrictions in place. The difference between those two numbers is the value of the easement. That easement value is the value of the charitable donation and in most cases can be taken as a tax deduction.


Easement map 2022-11-30 at 11.44.27 AM

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