There is a great tool - the conservation easement - to help preserve the character of this area. Popular in the United States, easements allow you to permanently protect your land while still retaining ownership. You continue to live on the land and use it, and you can sell or pass it onto your heirs.
HOW DOES A CONSERVATION EASEMENT WORK?
A conservation easement is an agreement between you and a qualified organization, such as the Conservancy, that places limits on land use in order to preserve your property's features. The easement is a legal agreement that is flexibly tailored to meet your financial and personal needs. You continue to own the land and the property remains private with no right of public access. This can apply to US taxpayers and Canadian.
One landowner in our area has created an easement to limit development on a prominent island, while another restricted her property to preserve the view of an island across the border. Landowners might want a conservation easement to restrict development and tree cutting in a sensitive woodland.
Once the agreement is registered on the title to the land, it binds current and future owners to the terms of the agreement. Changes can be made to an easement by mutual consent, usually to strengthen the easement's conservation value. The trustee which holds the easement will take on the responsibility to occasionally monitor the property. If a future landowner or someone else violates the terms of the easement, the trustee will approach the person to correct the problem, and retains the right to enforce the agreement if necessary. The donor of the easement may also wish to give a donation to help with future upkeep expenses of the easement.
A conservation easement can be granted in a number of situations:
- it can apply to all or only a portion of a property;
- it can be donated, sold, or traded for equivalent value;
- it can be created in a will (but best negotiated in advance to ensure the easement achieves its intended goals);
- it can be retained by a government to protect features on lands that it owns and will later dispose or sell; and
- it can be granted by developers to a land trust or municipality to protect a site before it is developed.
WHAT TAX BENEFITS APPLY TO CONSERVATION EASEMENTS?
Conservation easements may help relieve you of certain property and income taxes depending upon your particular circumstances. Where a conservation easement or other property is given to a charity like TIWLT, a tax receipt may be issued.
New tax rules ensure that you would get full credit for a donated easement's value. If there are no local comparable sales of easements, then an easement will be valued at the difference between the land's value with, and without the easement. While easement values vary greatly and need a proper appraisal, generally the more restrictive a conservation easement is, or ecologically sensitive the lands are, the higher its donated value.
If a conservation easement's restrictions reduce the land's value, this may also decrease other taxes. You might request that the property be revisited by the assessor to determine if there is an effect on value, and thus may be subject to lower property taxes. This request may or may not be successful.
A conservation easement is a flexible, creative agreement that allows you to protect your land into the future while maintaining ownership and often receiving tax benefits. For more about conservation easements, please contact TIWLT. -We can help design a conservation approach appropriate to your needs. We can also put you in touch with professionals familiar with conservation easements.