What is a "Conservation Easement" and How Do I as a Landowner Benefit?
For many people who own land and want to conserve the natural resources, historic uses of the property, or aesthetic value present, conservation easements are a valueable tool for helping achieve these goals.
In essence, a conservation easement is an agreement to ban future development on a given property in exchange for certain federal tax benefits to the land owner for the donation of the easement. The easement runs with the title to the land and continues in perpetuity.
A conservation easement (CE) is an agreement between a private landowner and an organization qualified to manage the guidelines of the CE. We have several here in SW Montana, most notably the Gallatin Valley Land Trust and the Trust for Public Lands. Because each property is unique, and the goals for each property will vary from owner to owner, CE's are specifically tailored to meet the needs of the property and the goals of the landowner.
For instance, a multigenerational ranch family is interested in placing a large portion fo their family holdings into a CE, but wants to ensure that future generations of the family have locations to build homes on the property. Building evelopes can be created within the subject property, even though it is restricted from formal subdivision development. Some CE's will allow the public to access property for hunting or other forms of recreation, such as hiking or horseback riding.
There are several requirements needed to qualify for the tax benefits, generally the easement for the property must:
- Be perpetual
- Be managed by or granted to a government agency or non-profit organization
- Placed for a specific purpose such as habitat protection, preservation of significant historic lands or to provide recreational opportunities
- Must be a gift with no reciprocal monetary benefit
Other factors come into play as well, such as the presence of mortgages or seperately held mineral interests that may need to be solved for. Generally the tax benefits include being able to deduct the value of the easement from your federal income tax. It may also reduce estate tax liabilities and some of the expenses associated with the property may be deductible.
If you work with landowners who are contemplating placing a CE on their property, I stongly urge you to seek out a qualified accredited land trust to discuss the specifics as well as their tax professionals. These cooperative agreements a great tools for preserving open space, wildlife habitat and environmentally sensitive lands.
All best,
______________________
Jason Frey
Agent
PureWest, Inc.
jason.frey@purewestproperties.com
http://www.linkedin.com/in/jasonfreylifewideopen
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