Donate a Conservation Easement
A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land to protect its conservation values. It allows you to continue to own and use your land and to sell it or pass it on to heirs.
When you donate a conservation easement to a land trust, you give up some of the rights associated with the land. For example, you might give up the right to subdivide or develop the land, while retaining the right to grow crops. Future owners also will be bound by the easement’s terms. The land trust is responsible for making sure the easement’s terms are followed.
Conservation easements offer great flexibility. An easement on property containing rare wildlife habitat might prohibit any development, for example, while one on a farm might allow continued farming and the building of additional agricultural structures. An easement may apply to just a portion of the property, and need not require public access.
A landowner sometimes sells a conservation easement, but usually easements are donated. If the donation benefits the public by permanently protecting important conservation resources and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation. The amount of the donation is the difference between the land’s value with the easement and its value without the easement. Placing an easement on your property may also result in property tax savings.
Perhaps most importantly, a conservation easement can be essential for passing land on to the next generation. By removing the land’s development potential, the easement lowers its market value, which in turn lowers the estate tax. Whether the easement is donated during life or by will, it can make a critical difference in the heirs’ ability to keep the land intact.
Donate land for conservation..
Donating land for conservation purposes is truly one of the finest legacies a person can leave to future generations. It may be the best conservation strategy for you if you 1) do not wish to pass the land on to heirs; 2) own property you no longer use; 3) own highly appreciated property; 4) have substantial real estate holdings and wish to reduce estate tax burdens; or 5) would like to be relieved of the resposibility of managing and caring for land.
Donating land releases you from the responsibility of managing the land and can provide substantial income tax deductions and estate tax benefits (while avoiding any capital gains taxes that would have resulted from selling the property). Most important, if the land is donated because of its conservation value, it will be protected. (Although our focus here is on conservation land, commercial and residential properties can also be donated to a land trust, with the understanding that the organization will sell the land to support its conservation work.)
Donating a remainder interest in land…
You can continue to live on the land by donating a remainder interest and retaining a reserved life estate. In this arrangement, you donate the property during your lifetime, but continue to live on and use the property. When you die (or sooner if you choose), the land trust gains full title and control over the property. By donating a remainder interest, you can continue to enjoy your land and may be eligible for an income tax deduction when the gift is made. The deduction is based on the fair market value of the donated property less the expected value of the reserved life estate.
Back in 2010, The Putnam Land Conservancy adopted The Sandhill Lakes Initiative to promote the conservation and restoration of sandhill upland lake shorelines and protect Sandhill plant and animal communities in perpetuity. Our first two Conservation Easements (CE) donated to PLC total 143 acres and include these environmentally sensitive lands. Our first CE is a 31 acre parcel with 1,000 feet of shoreline on Bream Lake. Our second CE is 112 acres with 2,200 feet of shoreline on Lake Galilee. These two CEs are important as Sandhill communities are listed as imperiled habitat in the Florida Natural Areas Inventory and as Sandhill Upland Lakes are identified as Environmentally Sensitive Lands in the Putnam County Comprehensive Plan.
Back in 2010, the Putnam Land Conservancy adopted The Targeted Subdivisions Initiative to eliminate and consolidate poorly located subdivisions by soliciting donations of lots therein and connecting or dedicating such lots to public use. Many of the undeveloped subdivision parcels in Putnam County lie within wildlife corridors.
So far to date in 2014, PLC’s Land Donation Program has has received over 425 parcels for a total of 320 acres in 8 counties while allowing donors about $1.2 million in income tax deductions.
Benefits to the land owner for donating parcels would be federal income tax deduction for the value of the donation and the removal of county tax liability as well as potential issues or liabilities associated with owning property as an absentee landlord.
The County benefits by reducing densities in these undeveloped subdivisions that are cost prohibitive to providing infrastructure and services. The County also reduces rising costs in services that are associated with sparse development.
Also back in 2010 the Putnam Land Conservancy adopted The Community Conservation Area Initiative to dedicate appropriate lots for conservation and public uses. Community Conservation Areas will provide habitat, scenic and open space to neighborhoods.
Some of the donated lots in non-targeted areas have potential as Community Conservation Areas which can provide food and cover for migrating birds and other species and also be used as habitats, nature parks, greenscapes, and community garden sites for surrounding neighborhoods.
Our first Community Conservation Area is a 24 acre park next to Little Lake McMeekin in Western Putnam County. Read about our restoration efforts at Land management update and in our newsletter.