What is a Conservation Easement?
A conservation easement is a legal agreement between a landowner and a land trust which restricts the future uses of the landowner’s property, and binds all future owners of the property. A conservation easement often specifies such things as the amount of subdivision that is allowed on a property or the number of houses that may be built. It does not grant public access to a property unless the landowner specifically wishes to allow it. Conservation easements are tailored to fit a landowner’s individual situation, and the terms of the easement are arrived at only after detailed discussions between the landowner and the land trust. A landowner may choose to have his or her easement held jointly by two land trusts, such as Maryland Environmental Trust and a local land trust, like the Howard County Conservancy.
Federal Income Tax Benefits
The donation of a conservation easement generally leads to significant deductions from income taxes under Federal tax law. The value of the easement donation is equal to the value of the property before encumbered by and easement minus the value of the property once an easement restrictions are in place. For appreciated property, the maximum deduction from federal income taxes permitted is 50% of your adjusted gross income for up to 15 years. Easement donors are required to fill out IRS Form 8283 to claim his or her deduction.
Property Tax Benefits
The donation of a conservation easement can greatly reduce property tax for some landowners. Once an easement has been recorded with the Land Records Office, a copy of the easement document will be sent to the County tax assessor. Conservation easement land is assessed at the highest agricultural rate, currently $500 per acre. Easement properties qualify for this reduce assessment rate even if no agricultural activities are currently in practice. The reduced assessment will not apply to any residential improvements on the property and a minimum of 1 acre around those improvements.
Easement Donation Process
Interested landowners in Howard County should contact the Howard County Conservancy, your local land trust. The Conservancy will schedule an initial site visit to your property to collect information and determine the potential conservation values of your property. You, the landowner, will contact an appraiser to determine the development potential of your parcel (this is where the potential value of your tax deduction will be determined). And if all parties agree to move forward, landowner and land trust will work together to form an easement document that satisfies all parties. We recommend each landowner seek legal counsel during this process. For more information please contact Tabby Fique, Easement Coordinator at the Howard County Conservancy 410-465-8877 ext. 109 or firstname.lastname@example.org
* The donation of a conservation easement is treated as a tax deductible charitable contribution if it meets the “qualified conservation contribution” requirements of the Internal Revenue Service Code’ Treasury Regulation 1.170A-14. A “qualified” easement must be granted in perpetuity permanently protecting important conservation resources. View our Conservation Easement Guide here.