Introduction to Conservation Easement Donations
Simply put, a conservation easement is an agreement with a non-profit organization or government agency that establishes limits on how the landowner’s property will be used in the future. A conservation easement is legally binding on all future landowners, and will protect the land from inappropriate development and uses in perpetuity while allowing the landowner to retain the rights of private ownership.
You donate an easement if you love your land and want to permanently protect the things you love about it, such as its scenic beauty, wildlife habitat, historic integrity, or its ability to provide a farming or forestry livelihood. These characteristics are your land’s “conservation values.” As an easement donor, you will be technically making a charitable donation by placing restrictions on the uses that could potentially compromise your land’s conservation values.
These restrictions are perpetual and generally will reduce the market value of the land being protected. Thus, in most cases, an easement donor is making a genuine and usually significant economic sacrifice.
Assisting landowners in their efforts to permanently protect the land they love is the primary focus of Conservation Partners, LLC (“Conservation Partners”). If, like most landowners, you don’t have the time, experience, or inclination to coordinate the complex, multi-faceted process of a conservation easement donation, you will find Conservation Partners’ full-service consulting to be both helpful and cost effective. We know how to facilitate the easement donation process by working efficiently and supportively with your easement holder and each of your legal, financial, and appraisal professionals.
Our job is to help you through each step of the conservation easement process—including marketing and selling your land preservation tax credit—without additional cost beyond what you would normally pay for the limited service of a credit broker. We have assisted hundreds of easement donors and we look forward to working with you and your advisors.
Certain government agencies and private charitable organizations commonly known as “land trusts” hold conservation easements in Virginia. “Holding” an easement means the land trust has agreed to accept the easement donation and will ensure the restrictions you’ve agreed to in the easement are enforced forever.
As the owner of the land, you remain responsible for its care and management. The easement holder will inspect the land periodically and is available to consult with you to make sure the use of the land is consistent with the terms of the easement.
Much of the undeveloped private land in this country is providing significant benefits to the public in the form of agriculture, forestry, clean water, scenic views, wildlife habitat, and so on—benefits that would be lost if the land were developed. When a landowner donates a conservation easement to a qualified holder, the public receives a long-term guarantee that the benefits it has been receiving from the landowner’s land will continue to flow, unimpaired by development.
The federal government and many state governments offer income and estate tax incentives that reward—and partially compensate—donors of qualifying conservation easements for their economic sacrifice. By offering tax benefits to donors of qualifying easements, the government is offering to share with landowners the costs associated with permanently protecting the important conservation values of their land.
Different easement holders have different criteria for determining which properties they will work with, so it’s hard to generalize. Any undeveloped land could be eligible, whether it’s forest, wetland, meadow, or cropland. Examples of factors to be considered include the property’s scenic value to the public; agricultural and forestry values such as prime soils and productive forests; the presence of threatened, endangered, or sensitive species or ecosystems; frontage on creeks, bays, rivers, wetlands, or other water bodies; historic values; designation under federal, state, or local conservation programs; and adjacency or proximity to other protected land or public conservation land such as National Forests or Wildlife Management Areas.
As noted above, you give up the right to impair the conservation values of your land. Usually the most economically significant right you give up is the right to develop your land for residential subdivision or harmful commercial uses.
After you have protected your land with a typical conservation easement, you can still sell it or leave it to your kids, live on it, farm it, and hunt, fish, and recreate on it.
Your easement can be customized to some extent, and often you’ll be able retain certain limited residential and commercial use rights so long as the easement deed is drafted to protect the conservation values of your land. And you will be able to maintain your privacy: contrary to what some people assume, you do not have to give the general public a right to come in and walk around on the protected land.
Granting a conservation easement is one of the most significant things a landowner can do, and it should be taken seriously and done correctly. Creating a proper easement donation can be time- consuming.
In some cases, the donation process may take several months to more than a year, depending upon the complexity of the easement. Working with an experienced consultant like Conservation Partners can help smooth the process significantly.
An easement donor, depending on their financial situation, can potentially benefit from various federal and state income and estate tax incentives. As an important part of our work with landowners interested in conserving their land, Conservation Partners facilitates the sale of transferable Virginia land preservation tax credits for easement donors.
Hundreds of individuals and companies look to us every year to supply them with high-quality land preservation tax credits that they use to offset their own state tax liabilities. See Potential Benefits.
Some easement donors, understandably, wonder why it costs money to give something away. But donating a conservation easement is an important undertaking—you are placing permanent restrictions on the use of your land, and you have the opportunity to realize tens or even hundreds of thousands of dollars of tax incentives—so good professional help is an essential investment.
Careful deed preparation by an experienced attorney is necessary to ensure that the easement is properly crafted to meet your needs, to express your long-term plans for your property, and to comply with all applicable legal requirements. In addition, an easement appraisal is a complex undertaking that requires significant expertise on the part of the appraiser. A qualified accountant is also an important member of the easement donor’s team. All in all, professional fees often total $8,000 to $12,000, and can be significantly higher when an easement transaction is very large and/or complex.
For general consultation, preparation, marketing, and sale of tax credits, Conservation Partners charges a fee that in most cases is equal to a percentage of the face value of the credits we sell. Our fee is typically deducted from the credit sales proceeds. We also provide services for easement donors who don’t want to sell their credits.
Through our Advance Funding Program, Conservation Partners advances some or all of the donor’s costs of donating a conservation easement, subject to reimbursement after the tax credit has been sold.
I’m interested…what should I do first?
Call Conservation Partners. We can get you started, and we’ll help you find an easement holder and introduce you to highly experienced attorneys, appraisers, accountants, and any other professionals you need to help you with your decision. Once you decide to move forward, we will work closely with you and your advisors through each step of the process.
At the end, we will assist with the registration of your credit with the Department of Taxation and then market your credit to our extensive list of buyers. Conservation Partners has helped hundreds of landowners who have protected more than 100,000 acres of farms, forests, and other open space land.
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