The Benefits of a Conservation Easement

Every conservation easement is a unique legal agreement, written specifically to fit your needs and goals. You can set up a conservation easement to:

• Protect open space or critical habitat on your land– whether it’s a family farm or ranch, wetland, pasture or forest—from encroaching development
• Preserve the agricultural value and traditional uses of your land by allowing for continued farming, ranching and timber harvesting
• Safeguard a historically or culturally important structure or area on your property
• Conserve land that has significant scenic, biodiversity or other value for the outdoor recreation or education of the public

Whether you place all or only part of your property into a conservation easement, you can expect to benefit from the agreement in several ways.

Estate tax benefits. A conservation easement that removes your land’s development potential typically lowers its market value—and that means lower taxes for the landowner. That can significantly reduce estate taxes when you pass on your property to the next generation, making it easier to keep the land in the family and intact.

Property tax benefits. By lowering your land’s value, a conservation easement can also lower your property taxes.

State and federal tax benefits. If your conservation easement is permanent, was donated—not sold—to a land trust for conservation purposes, and meets certain other IRS conditions, it can qualify as a tax-deductible charitable donation that can reduce your state and federal income taxes. The easement is treated as a donation of the development rights to your land. That means the value of the donation (and the amount of the deduction you can claim) would be the difference between the property’s market value if its development were not restricted in any way, and its value with the easement’s restrictions in place.

Permanency and control. Most easements are permanent and crafted specifically to meet your goals. Their restrictions remain in force even when the land changes hands. With the right easement terms in place, you can have the peace of mind of knowing your land will be protected as you wish well beyond your lifetime.

Although conservation easements offer significant benefits, they are not for every landowner. There are some important points to keep in mind when you consider a conservation easement.  

Next: Is a Conservation Easement Right for You?