CONSERVATION EASEMENTS

The Conservation Easement is a legal agreement that protects land while leaving it in private ownership. Each easement’s restrictions are tailored to the particular property and to the interests of the individual owner. A landowner generally donates the easement to a qualified conservation organization or government agency which in turn ensures that the conditions of the easement are met over time.

Conservation Easements offer significant 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.

If the Conservation Easement benefits the public by permanently protection 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 property may also result in estate and property tax savings.

An easement can be written so that it lasts forever. This is known as a perpetual easement. Where state law allows, an easement may be written for a specified period of years, and this is known as a term easement. Only gifts of perpetual easements, however, can qualify a donor for income and estate tax benefits. Most organizations accept only perpetual conservation easements.

Perhaps most important, 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 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.

 

South Dakota Parks and Wildlife Foundation – November 2001